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BREWERY  ACCOUNTS 


BY 


FRANK  W.  THORNTON,  C.P.A. 


RONALD   ACCOUNTING 
SERIES 


NEW  YORK 

THE  RONALD  PRESS  COMPANY 

1913 


COPYRIGHT,  1913, 

BY 

THE  RONALD  PRBJSS  COMPANY 


^tmxnl  ^hUmmi  oi  ^iritnrial  §0arJr 


Applicable  to  all  books  of  the 
Ronald  Accounting  Series 


THE  manuscripts  of  the  books  forming  the 
Ronald  Accounting  Series  have  been  sub- 
mitted to  us  and  have  been  approved  by  us  for 
publication. 

In  some  cases  the  authors  express  views  that 
are  not  fully  in  accord  with  those  entertained  by 
us,  but  in  no  instance  are  such  differences  of 
sufficient  importance,  in  our  judgment,  to  warrant 
the  withholding  from  publication  of  a  meritorious 
work. 

J.  E.  Sterrett 

Robert  H.  Montgomery 


PREFACE 

During  the  last  twenty  years  the  percentage  of  gross 
profit  on  manufacturing  operations  in  general  has  greatly 
decreased. 

No  business  has  suffered  more  from  this  shrinkage  than 
that  of  brewing,  for  while  in  other  lines  of  manufacture 
selling  prices  can  be  adjusted  to  meet  increased  manufac- 
turing cost,  such  adjustments  seem  almost  hopeless  in  the 
brewing  business. 

Prior  to  1890  the  profits  of  breweries  were  so  large  that 
close  accounting  was  not  indispensable;  for  so  long  as  the 
volume  of  business  was  maintained  or  increased,  and  the 
physical  operations  of  manufacture  were  fairly  well  con- 
ducted, a  reasonably  good  profit  on  capital  invested  was 
assured. 

This  prosperous  condition  led  customers  to  impose  on 
breweries  for  loans,  gifts,  etc.,  and  to  seek  their  aid  in  all 
financial  troubles.  Such  aid  was  very  freely  given;  and 
the  disposition  to  extort  from  brewers  unreasonable  gratui- 
ties, allowances  and  favors  grew,  and  still  continues. 

Increase  in  running  expenses,  cost  of  materials  and  bad 
debts  have  so  reduced  the  margin  of  profit  that  it  has  become 
essential  not  only  to  have  correct  cost  accounts,  but  to 
arrange  the  books  so  that  the  brewery  managers  may  ascer- 
tain without  delay  the  results  of  current  operations. 

An  annual  or  semi-annual  profit  account  no  longer 
serves:  monthly  reports  must  be  had,  and  that  promptly, 
so  that  leaks  may  be  stopped  before  serious  losses  are 
incurred. 


PREFACE 

Some  brewers  still  cling  to  old  accounting  methods,  and 
object  to  pay  for  the  slight  increase  in  clerical  work  neces- 
sary if  they  wish  to  obtain  prompt  information  as  to  their 
profits  on  current  operations.  Such  brewers  must  be  left 
to  learn  by  experience;  and  if  present  conditions  continue, 
the  lesson  will  be  a  very  hard  one. 

The  present  book  is  intended  to  facilitate  the  keeping 
of  modern  brewery  accounts  with  the  smallest  amount  of 
labor  consistent  with  the  prompt  preparation  of  reliable 
monthly  operation  reports. 

No  untried  methods  have  been  recommended ;  theory  has 
in  each  case  been  checked  by  practice ;  and  the  methods  out- 
lined have  been  found  to  be  satisfactory  for  the  purposes 
for  which  they  were  designed. 

F.  W.  Thornton. 

New  York  City,  July  i,  1913. 


CONTENTS 


PART  I— THE  RECORDS  OF  A  BREWERY 
Chapter  I.     Manufacturing  Accounts 

Scope  of  Brewery  Accounts 

Manufacturing  Records 

Materials  Used  in  Brewing 

Alcohol-Producing  Materials 

Hops 

Labor  and  Expenses 

Cost  of  Output 

Brewers'  Grains 

Use  of  Ammonia,  and  Sale  of  CO2 

Brewery  Cost  Accounts 

General  Manufacturing  Expenses 

Summary  of  Manufacturing  Records 

Chapter  II.    General  Methods  and  Conditions  of  Selling 

Loans  to  Customers 

Selling  Methods 

Brewery  Salesmen 

Cost  and  Selling  Prices  T' 

Controlled  Customers 


viii  CONTENTS 

Chapter  III.     Customers'  Accounts 

Routine  of  Orders 
Customers'  Pass-Books 
Combined  Sales  Book  and  Ledger 
Reserve  for  Discounts 
Out-of-Town  Trade 
Statements — Collections 

Chapter  IV.    Selling  Expenses 

Collectors'  Salaries,  etc. 

Bad  Debts 

Signs  and  Advertising 

Repairs  to  Saloon  Fixtures 

Office  Salaries  and  Expenses 

Brewers'  Association  Assessments 

Summary  of  Selling  Accounts 

Chapter  V.     Distributing  Expenses 

Care  of  Packages — Replacements 
Summary  of  Distributing  Expenses 

Chapter  VI.    Administrative  Expenses 

Elimination  of  Manufacturing  and  Selling  Expenses 
Entry  of  Expenses 

Chapter  VII.     Country  Breweries 

Conditions  of  Country  Trade 
Deliveryman's  Report 

Chapter  VIII.     Monthly  Report  of  Operations 

Forms  Used 


CONTENTS  ix 

Chapter  IX.     Bottling  Accounts 

Treatment  of  Bottling  Accounts 

Chapter  X.     Assets — Plant  and  Equipment 

Buildings,  Brewery 

Outside  Property 

Machinery  and  Permanent  Plant  (Not  Buildings) 

Floating  Cooperage 

Chapter  XI.     Assets — Inventory  and  Saloon  Fittings 

Inventory,  Liquor  and  Materials 
Saloon  Fittings 

Chapter  XII.     Assets — Customers'  Accounts 

Lager  Beer  Accounts 
Ale  Accounts 

Customers'  Loan  Accounts 
Verification  of  Prices 
Verification  of  Loans 
Collateral  for  Loans 

Chapter  XIII.    Assets — Bills  Receivable  and  Cash  on  Hand 

Bills  Receivable 
Cash  on  Hand 


CONTENTS 

PART  II— FORMS 
Chapter  XIV.     Notes  on  Forms 
Chapter  XV.    Illustrative  Forms 

HIBXT 
MBER 

1.  General  Journal 

2.  Voucher  Register 

3.  Ale  Sales  Book 

4.  Sales  Book 

5.  Ledger  and  Sales  Book  Combined  (City  Lager  Beer 

Trade) 

6.  Ale  Ledger 

7.  Cash  Book — Receipts 

8.  Cash  Book — Payments 

9.  License  Ledger 

10.  Comparative  Brewing  Value  of  Materials  Used 

11.  Composition  of   Various   Typical   Grades   of   Malt 

Liquors 

12.  Periodical  Report  of  Manufacturing,  Cost 
13a.  Cellar  Slip — Lager  Beer 

136.  Cellar  Slip — Ale 

14.  Delivery  Receipts 

15.  Collection  Register 

16.  Deliveryman's  Report  of  Liquor  Delivered  and  Cash 

Collected 

17.  Summary  of  Costs 
iSa-b-c,     Reports  of  Operations 
iga-b.     Supplementary  Schedules 


BREWERY   ACCOUNTS 


Part  I  —  The   Records    of  a    Brewery 


CHAPTER  I 

MANUFACTURING  ACCOUNTS 

Scope  of  Brewery  Accounts 

The  accounts  of  a  brewery  cover  two  disassociated 
classes  of  operations  :  first,  the  manufacture  of  liquor,  which 
can  and  should  be  accounted  for  with  the  strictest  accu- 
racy; and  second,  the  sale  and  distribution  of  the  liquor, 
from  which  arise  the  accounts  of  the  customers,  principally 
saloon-keepers.  The  accounts  of  these,  for  reasons  to  be 
set  forth  herein,  are  perhaps  the  most  irregular  and  inexact 
accounts  met  with  in  large  enterprises. 

The  principal  books  of  a  brewery  are  usually  as  follows, 
those  marked  "a"  entering  into  manufacturing  accounts, 
those  marked  "b"  entering  into  selling  and  distributing 
accounts : 

General  ledger       a-b Ordinary  form 

General  journal    a-b Special^Exhibit  i 

Voucher  register  a     Special — Exhibit  2 

Sales  books  b    Special — Exhibits  3-4 

Sales  ledgers        b    ......  Special— Exhibits  5-6 

Creditors'  ledger  a    Ordinary  form 

Q 


lO  BREWERY    ACCOUNTS 

Loan  ledger  b    ..... .Ordinary  form 

Cash  books  ,a-b Special — Exhibits  7-8 

License  ledger      b    ......  Special — Exhibit  9 

Manufacturing  Records 

The  cost  of  manufacturing  includes  cost  of  materials, 
brewing  labor,  refrigeration,  steam  and  power,  repairs  to 
plant  (not  including  barrels  and  kegs,  and  horses  and  wag- 
ons), provision  for  depreciation  to  machinery  and  buildings, 
and  supplies.  A  small  proportion  of  the  cost  of  the  office 
staff  may  properly  be  added. 

The  use  of  the  voucher  record  to  take  up  the  purchases 
of  materials  need  not  be  explained,  but  the  record  should 
be  so  arranged  that  inventory  accounts  for  each  of  the 
principal  materials  (as  "Malt,"  "Flakes,"  "Meal,"  "Grits," 
"Other  Unmalted  Cereals,"  "Glucose,"  "Hops."  and  "Sun- 
dry Materials")  may  be  kept. 

Materials  are  usually  purchased  in  packages  having  a 
fixed  content — hops  in  bales,  with  the  weight  marked  on  each 
bale;  malt,  grits,  flakes,  etc.,  in  bags  of  80  or  100  pounds. 
It  is  therefore  easy  to  verify  physically,  at  the  end  of  each 
month,  the  stock  on  hand.  This  should  always  be  done 
and  the  stock  agreed  with  the  balance  of  the  inventory 
account. 

On  commencing  operations,  materials  for  a  brewing  are 
withdrawn  from  stock  under  direction  of  the  brewmaster, 
who  should  keep  a  record  of  quantities  taken.  At  the  end 
of  each  month  the  recorded  quantities  are  credited  to  the 
inventory  accounts  and  charged  to  Manufacturing  account. 
The  quantity  of  liquor  thus  put  in  process  of  manufacture 
must  be  taken  up  as  liquor  in  stock,  in  a  book  prescribed 
by  the  Internal  Revenue  Bureau,  and  afterward  accounted 
for  as  liquor  to  be  stamped  before  sale. 

This  government  requirement  makes  it  desirable  that 


MANUFACTURING   ACCOUNTS  II 

at  the  end  of  each  month  the  Manufacturing  account,  to 
which  the  materials  have  been  charged,  should  be  charged 
with  the  month's  labor,  steam  and  power,  refrigeration, 
and  brewery  supplies  and  expenses,  and  then  closed  out  to 
Liquor  Stock  account,  charging  the  latter  with  the  num- 
"ber  of  barrels  shown  on  the  register  prescribed  by  the 
government. 

This  procedure  is  open  to  the  objection  that  there  is 
always  a  certain  amount  of  partially  manufactured  liquor 
in  stock  which  is  recorded  and  valued  as  finished  liquor. 
Its  convenience,  however,  much  more  than  offsets  the  theo- 
retical objection.  Although  the  liquor  will  remain  in  process 
for  some  time,  the  greater  part  of  the  labor  in  connection 
with  brewing  is  expended  in  the  first  two  or  three  days,  so 
that  the  amount  of  error  is  not  large.  Moreover,  there 
is  a  compensation  that  does  not  appear  on  the  face  of  the 
records :  the  quantities  are  estimated  by  the  Internal  Reve- 
nue Bureau  on  the  basis  of  measurements  of  the  brewing- 
vats,  with  specific  allowances — varying  for  ale  and  beer — 
for  waste  and  shrinkage.  These  allowances  exceed  the 
actual  losses,  including  beer  consumed  in  the  brewery;  and 
in  every  well-kept  brewery  there  is  always  on  hand  an 
excess,  which  may  amount  to  two  days'  product,  over  the 
amount  shown  by  the  government  record  and  the  Liquor 
Stock  account  in  the  general  ledger.  The  exact  amount  of 
this  excess  cannot  be  determined  until  the  liquor  is  finally 
put  in  packages  for  sale ;  but  as  soon  as  the  excess  becomes 
higher  than  the  amount  indicated  above,  the  brewery  should 
voluntarily  take  up,  on  the  books  and  in  the  government 
record,  a  part  of  the  estimated  excess. 

Materials  Used  in  Brewing 

The  materials  include  (i)  the  alcohol-producing  mate- 
rials, which  may  be  malt  with  or  without  the  addition  of 


12  BREWERY   ACCOUNTS 

meal,  grits,  flakes,  glucose,  cane  sugar,  or  any  unmalted 
cereals  or  cereal  products;  (2)  a  bitter  principle,  almost 
invariably  hops,  or  hop  extracts;  and  (3)  water  and  sundry 
brewing  materials.  These  sundry  materials  include  Irish 
moss;  porterine  and  caramel,  for  coloring;  filtermass;  sul- 
phurous anhydride ;  gelatine  for  fining,  and  other  substances 
of  small  importance. 

Alcohol-Producing  Materials 

As  the  relative  prices  of  the  alcohol-producing  materials 
vary  widely,  partial  substitutions  of  one  for  another  are 
frequent,  and  it  is  desirable  that  the  accountant  be  in  a 
position  to  ascertain  that  the  quantity  charged  against  the 
liquor  manufactured  is,  within  reasonable  limits,  justified 
by  the  output. 

For  this  purpose  the  reduction  to  a  common  standard 
of  the  brewery  values  of  varying  materials  is  necessary, 
and  the  most  convenient  standard  is  found  to  be  the  quan- 
tity of  glucose  each  is  capable  of  producing,  such  quantity 
to  be  compared  with  the  glucose  corresponding  to  the  alcohol 
produced  plus  glucose  left  unfermented  in  the  finished 
product. 

It  may  be  noted  here  that  no  alcohol  is  produced  by 
fermentation  from  any  substance  other  than  glucose;  and 
that  where  malt,  meal,  or  other  cereal  products  are  used 
the  constituent  that  eventually  becomes  alcohol  must  first 
pass  into  the  condition  of  glucose.  It  follows,  therefore, 
that  glucose,  or  any  material  producing  glucose,  is  not  an 
adulterant. 

The  accountant  should  not  be  led  by  his  calculations 
to  the  conclusion  that  any  material  showing  the  cheapest 
glucose  can  be  substituted  entirely  for  all  others,  as,  for 
technical  reasons  connected  with  the  production  of  yeast 
and   with   flavors   produced    incidentally   by   certain    non- 


MANUFACTURING  ACCOUNTS  1 3 

alcohol-producing  constituents,  the  possibility  of  substitution 
is  limited. 

In  ale  brewing,  glucose  is  added  to  hasten  fermentation, 
even  though  the  same  amount  of  alcohol  might  be  produced 
more  cheaply  from  malt. 

Analyses  of  the  principal  alcohol-producing  materials 
show  their  relative  values  to  be  approximately  as  follows: 

Pure  glucose i.oo 

Malt  (barley) 64 

Flakes  (rice) 78 

"Cerealin" 78 

Meal  (corn) 58 

Cane  sugar i.oo 

Sugar-glucose  (Corn  Prod.  Ref.  Co.,  solid)       .70 

Sugar-glucose   (syrup) 60 

Malt  (wheat) 68 

The  content  of  standard  American  lager  beer  is  from 
3  to  3^%  alcohol  and  from  3  to  5%  unfermented  glucose, 
the  average  being  about  33^%  alcohol  and  4j^%  unfer- 
mented carbohydrates.  Ordinary  American  light  ales  con- 
tain alcohol,  4J4%J  carbohydrates,  5%.  Cheap  beers  sold 
at  seaside  resorts,  etc.,  are  not  only  poor  in  alcohol  but  are 
attenuated  so  far  that  the  amount  of  unfermented  carbo- 
hydrates may  fall  below  2%. 

Glucose  produces  51.1%  of  its  weight  of  alcohol.  The 
foregoing  figures,  therefore,  show  that  to  produce  a  barrel 
(262  pounds)  of  lager  beer  of  standard  quality  about  29 J^ 
pounds  of  glucose  are  required,  and  to  produce  a  barrel 
of  light  ale  about  37  pounds  of  glucose. 

The  manner  of  using  these  figures  in  checking  the  con- 
sumption of  material  may  be  made  clearer  by  an  actual 
example : 


14  BREWERY   ACCOUNTS 

A  brewery  produced  in  a  certain  period  63,240  barrels 
of  ale  and  50,645  barrels  of  lager  beer.  The  glucose  required 
was : 

Ale,     63,240  X  37  lbs.      )  z:    11  .        1 

_  ^'  ^^    ,   ,,     >  averag^e  33.67  lbs.  per  barrel. 

Beer,  50,645  X  29^4  lbs.  S  ^    ^^    ^         ^ 

The  actual  consumption  of  materials  was,  per  barrel : 

Glucose 

Malt 32.5    lbs.  X  .64  =  20.80  lbs. 

Flakes  5.07  lbs.  X  .78  =    3.96  lbs. 

Sugar  (Corn  Prod.  Ref.  Co., 

solid) 1 1.2    lbs.  X  .70  ^    7.84  lbs. 


Total  per  barrel 32.60  lbs. 

It  appears  from  these  figures  that  the  product  was  a 
little  lighter  than  the  average  standard  liquor;  analyses 
showed  that  it  was  so. 

Almost  all  breweries  frequently  have  analyses  made  of 
their  products,  special  analysts  being  employed  by  the  brew- 
ers' associations  for  this  purpose.  Exhibit  10  (Chapter  XV) 
shows  the  details  of  the  computation  of  the  alcohol  values 
of  brewing  materials.  Exhibit  11  shows  the  glucose  con- 
tent of  other  standard  grades  of  malt  liquor,  and  from  the 
figures  given  the  consumption  of  materials  for  any  given 
grade  may  be  checked. 

Hops 

The  bitter  principle  used  in  brewing,  which  properly 
may  be  hops,  or  hop  extracts,  or  the  so-called  "lupulin," 
which  is  really  a  hop  extract  and  not  chemically  pure  lupu- 
lin,  cannot  be  checked  in  the  same  manner  as  the  alcohol- 


MANUFACTURING   ACCOUNTS 


15 


producing  constituent.  Hops  vary  widely  in  price  and 
strength,  but  over  three  years,  from  1910  to  191 2,  the 
figures  of  a  large  number  of  breweries  show  a  variation 
of  between  11  and  18  cents  per  barrel.  During  this  period 
Western  hops  sold  from  12  to  18  cents  per  pound,  and  the 
highest  consumption  of  hops  did  not  exceed  one  pound  per 
barrel. 

Labor  and  Expenses 

Charged  against  the  cost  of  manufacture  should  be  the 
labor  of  tie  brewmaster,  kettlemen,  all  employees  engaged 
in  operatmg  the  plant,  including  rackers,  but  not  cellarmen, 
barrel-washers,  nor  any  employees  whose  work  takes  up 
the  product  after  racking.  These  latter  employees  are 
engaged  in  work  properly  chargeable  to  distribution  and 
sale. 

It  is  preferable  to  keep  separate  accounts  of  the  labor 
and  other  costs  of  steam  and  power  and  of  refrigeration; 
and  these  two  accounts  should  be  closed  out  into  the  Manu- 
facturing account  at  the  end  of  each  month. 

Cost  of  Output 

The  cost  per  barrel  for  the  various  items  entering  into 
brewing  cost  should,  at  the  prevailing  rate  of  wages  in  the 
Eastern  part  of  the  United  States  at  present  (1913),  be 
approximately  as  follows : 

COST,  IN   CENTS  PER  BARREL,   FOR  ANNUAL  OUTPUT  IN 
BARRELS 


100,000 

200,000 

to 

to 

200,000 

300,000 

Brewing:  labor 18-22         16-18 


'fe 


Repairs  to  machinery 3 


1 6  BREWERY   ACCOUNTS 

Depreciation   of  machinery  and   plant, 

etc.  (not  including  floating  cooperage 

nor    wagons,    but    including    fixed 

cooperage) 7-9  6-7 

Steam,  power,   refrigeration,   including 
coal  : 

For  lager  beer  and  carbonated  and 

sparkling  ale 18-20         15-18 

For  stock  and  sour  ales 10-12  8-10 

Supplies,  taxes,  brewing  expenses 15-17         12-15 

The  depreciation  of  buildings  cannot  be  stated  in  terms 
of  cost  per  barrel;  the  values  of  brewery  buildings  vary 
very  widely,  and  the  depreciation  depends  largely  on  the 
character  of  the  structures.  It  may  be  noted,  however, 
that  the  construction  of  brewery  buildings  is  usually  not 
only  of  great  strength  and  durability,  but  is  of  such  plain, 
bare  character  that  there  is  very  little  deterioration  of 
windows,  doors,  partitions,  etc.  On  the  other  hand,  a 
brewery  building  is  of  very  little  use  for  any  other  purpose. 

While  the  figures  as  given  above  are  for  plants  of 
varying  capacity,  it  is  assumed  that  they*  are  operating  at 
their  normal  capacity.  The  economy  of  these  plants  suffers 
severely  if  they  be  too  large  for  their  trade.  Refrigeration 
and  steam  and  power  are  especially  costly  in  a  straggling 
or  underworked  plant. 

Most  breweries  attempt  to  keep  an  account  of  liquor 
wasted  and  consumed  on  the  premises.  Careful  investiga- 
tion shows  that  these  accounts  are  meaningless.  The  surplus 
over  the  amount  which  the  rules  of  the  Internal  Revenue 
Department  require  to  be  taken  up  is  much  greater  than 
the  amount  consumed;  it  also  varies  with  weather  and 
other  conditions,  and  the  brewery  office  cannot  check  by 
the  inventory  accounts  the  amounts  actually  consumed  on 


MANUFACTURING   ACCOUNTS 


17 


the  premises.  The  figures  furnished  to  the  brewery  office 
showing  the  amount  consumed  are  purely  fictitious.  As 
little  or  no  restriction  is  placed  upon  the  consumption  in 
the  brewery,  it  is  difficult  to  see  what  purpose  the  figures 
serve. 

Brewers'  Grains 

The  spent  grains  should  be  accounted  for  and  taken 
up  as  a  deduction  from  manufacturing  cost.  In  cities,  the 
grains  will  bring  from  4  to  6  cents  per  barrel  brewed;  in 
some  country  districts,  where  cattle  feed  is  needed,  10  to  12 
cents  per  barrel  is  often  obtained.  On  the  other  hand,  in 
Texas  and  California,  where  cattle  feed  is  cheap,  only  2 
cents  per  barrel  can  be  recovered. 

Use  of  Ammonia,  and  Sale  of  CO2 

Ammonia  is  used  in  most  refrigerating  plants,  but  some 
breweries  have  installed  a  system  by  which  the  carbon 
dioxide  gas  liberated  in  the  process  of  fermentation,  which 
amounts  to  about  97%  of  the  weight  of  alcohol  produced, 
is  collected  and  used  in  the  refrigerating  machine  instead 
of  ammonia.  In  such  breweries  the  uses  of  the  gas  are 
three :  part  is  used  to  carbonate  the  product ;  part,  as  stated 
above,  for  refrigeration;  and  part  is  sold  in  cylinders  for 
the  purpose  of  carbonating  other  beverages.  The  cost  of 
ammonia  is  small,  not  exceeding  i  cent  per  barrel,  and  the 
amount  of  CO2  sold  does  not  often  exceed  5  cents  per 
barrel  brewed.  The  cost  of  power  is  slightly  greater  where 
the  CO2  refrigerating  system  is  used,  so  that  the  accounts 
will  not  be  much  affected  by  this  difference  in  brewing 
practice. 

Brewery  Cost  Accounts 

No  useful  purpose  would  be  served  by  cost  accounts 


l8  BREWERY    ACCOUNTS 

showing  the  separate  costs  of  individual  brewings.  The 
product  is  so  constant  in  character,  so  long  a  period  in 
process,  and  the  several  brewings  are  so  often  consolidated 
before  the  exact  output  of  each  can  be  determined,  that 
the  only  cost  accounts  of  value  are  those  taking  up  the 
whole  output  for  a  period  of,  say,  one  month. 

All  the  figures  may  be  obtained  from  accounts  kept  in 
the  general  ledger.  A  form  of  report,  showing  the  origin 
and  treatment  of  the  several  items,  forms  Exhibit  12  (Chap- 
ter XV). 

All  the  inventory  accounts  in  the  general  ledger,  of 
materials  as  well  as  of  liquor,  should  be  arranged  to  show 
not  only  values  but  quantities  also.  The  number  of  such 
accounts  is  so  small,  and  the  expression  of  quantities  so 
simple,  being  confined  to  records  of  weight  in  the  case 
of  materials,  and  of  barrels  in  case  of  liquor,  that  no  diffi- 
culty is  experienced  in  recording  them  by  the  side  of  corre- 
sponding entries  of  values. 

If  a  brewery  produces  two  or  more  different  grades  of 
liquor,  and  it  be  desired  to  keep  separate  cost  accounts  for 
each,  this  purpose  will  be  served  by  charging  against. each 
grade  the  materials  used,  distributing  the  labor  and  expenses 
of  brewing  over  the  whole  product  on  a  per  barrel  basis. 
In  order  to  carry  out  the  separation,  separate  manufacturing 
and  liquor  stock  accounts  are  required.  Upon  the  whole, 
there  is  little  difference  between  the  cost  per  barrel  of  brew- 
ing ale  and  lager  beer. 

Sales  of  lager  beer  and  ale  are  invariably  separated 
on  the  books,  if  for  no  other  reason,  because  the  compara- 
tively intermittent  character  of  the  ale  trade  makes  it  eco- 
nomical to  record  sales  in  a  somewhat  different  manner. 
(See  Exhibits  3  and  4.) 

^^he  accurate  and  economical  separation  of  the  expenses 
oflfiistributing  and  selling,  as  between  ale  and  lager  beer, 


MANUFACTURING   ACCOUNTS  19 

or  between  varying  grades  of  ales,  is  impracticable.  Here, 
again,  no  serious  error  arises  in  charging  the  expenses  to 
the  various  grades  on  a  per  barrel  basis  applicable  to  the 
whole  product. 

When  separate  buildings,  plant  and  personnel  produce 
ale  and  beer  respectively,  the  separation  of  cost  factors 
may  be  more  accurate,  but  this  seldom  occurs,  especially 
as  the  ale  and  beer  trades  are  seasonal  and  to  a  large  extent 
mutually  complementary. 

General  Manufacturing  Expenses 

General  manufacturing  expenses  include  insurance,  taxes, 
current  repairs,  water,  supplies  for  the  brew^ery,  and  a 
proportion  of  office  expenses. 

Insurance  should  be  provided  for  by  a  monthly  credit 
to  Insurance  account,  with  a  corresponding  debit  to  General 
Manufacturing  Expense.  Insurance  cost,  as  paid,  should 
be  charged  to  the  Insurance  account,  the  debit  balance  of 
such  account  representing  the  value  of  insurance  unexpired. 

Taxes  should  be  treated  in  the  same  manner,  except  that 
the  balance  of  the  Taxes  account  may  represent  either  taxes 
paid  in  advance  or  taxes  accrued  and  unpaid. 

Current  Repairs  may  be  charged  as  expenses  are  in- 
curred; care  should  be  taken  not  to  charge  to  this  account 
renewals  and  replacements  of  machinery,  etc.  Replacements 
and  renewals  of  this  character  should  be  charged  against 
the  reserve  for  depreciation  of  plant,  which  should  be  suffi- 
cient to  provide  for  them  in  addition  to  covering  the  depre- 
ciation of  non-renewable  assets.  In  this  way  the  burden 
of  renewals  will  be  anticipated  during  the  period  of  use, 
and  not  charged  wholly  against  the  period  in  which  renewals 
take  place. 

Water  is  frequently  obtained  from  wells  owned  by  the 
brewery,  when  the  cost  of  obtaining  it  will  be  absorbed 


20  BREWERY   ACCOUNTS 

in  the  accounts  for  steam  and  power  and  repairs.  If  pur- 
chased, it  will  be  by  meter  measurement,  and  the  meter 
readings  can  be  taken  monthly  and  charged  to  this  account. 

General  brewery  supplies,  such  as  hose,  brooms,  small 
utensils  and  tools,  may  be  taken  up  as  expense  when 
purchased. 

If  a  proportion  of  office  expenses  be  charged  to  the 
Manufacturing  Expense  account,  which  is  desirable,  the 
charge  is  put  on  the  books  by  journal  entry,  as  follows : 

Manufacturing  Expense  (proportion) 
Selling  Expense  " 

Office  Salaries  and  Expense 
(total  for  month) 

Summary  of  Manufacturing  Records 

Purchases  of  materials. — Entered  in  voucher  record, 
posted  to  inventory  accounts  in  general  ledger. 

Withdrawals  of  materials  for  brewing. — ^Journalized 
monthly ;  charged  to  Manufacturing  account. 

Quantities  brewed. — Entered  in  revenue  stamp  book,  re- 
corded by  brewmaster,  transferred  monthly  to  Liquor  Stock 
account. 

Labor. — Distribution  of  pay-roll  such  that  each  depart- 
ment is  charged  with  its  proportion,  the  manufacturing  labor 
other  than  that  for  steam  and  power  and  refrigeration  being 
charged  directly  against  Manufacturing  account. 

Steam  and  power  and  refrigeration. — Coal  and  labor 
and  sundry  expenses,  charged  first  to  these  accounts,  the 
total  at  the  end  of  the  month  being  closed  out  to  Manu- 
facturing account. 

Depreciation  of  plant. — Monthly  charge  to  Manufac- 
turing account  by  journal  entry,  establishing  a  depreciation 
reserve. 


MANUFACTURING  ACCOUNTS  21 

Current  repairs. — Repairs,  not  replacements,  to  be  re- 
corded separately  in  the  general  ledger,  the  account  being 
closed  out  at  the  end  of  each  month  to  Manufacturing  ac- 
count. These  repairs  include  repairs  on  machinery  and 
plant,  but  not  on  floating  cooperage,  nor  on  wagons,  nor 
on  office  fixtures.  They  do  not  include  cooi>ers'  wages, 
which  are  part  of  the  cost  of  distribution. 

Current  repairs,  water,  supplies. — Charged  through 
voucher  record;  taxes  and  insurance  charged  against  re- 
serves provided  therefor,  through  journal. 

Closing  of  Manufacturing  account. — The  account,  after 
taking  up  all  the  monthly  charges,  to  be  closed  by  journal 
entry  into  Liquor  Stock,  the  barrelage  so  charged  to  Liquor 
Stock  being  the  net  amount  brewed,  as  set  forth  in  the 
internal  revenue  stamp  book  and  agreed  with  the  brew- 
master's  record. 


CHAPTER  II 

GENERAL  METHODS  AND  CONDITIONS  OF 
SELLING 

In  order  that  the  accounting  of  a  brewery  may  be  better 
understood  a  general  description  of  seUing  methods  and 
conditions  is  needed. 

Most  of  the  customers  of  breweries  are  saloon-keepers, 
often  men  of  little  acquaintance  with  modern  business  meth- 
ods and  sometimes  illiterate.  The  selling  arrangements 
made  with  such  men  are  necessarily  different  from  those 
usual  in  other  businesses. 

Loans  to  Customers 

Where  the  saloons  are  not  controlled,  by  ownership  or 
otherwise,  an  arrangement  is  generally  mcide  by  which  the 
brewery  fits  up  the  saloon  and  furnishes  the  saloon-keeper 
with  money  to  stock  his  place  with  furniture  and  sometimes 
with  spirits  and  cigars.  These  loans  should  be  covered  by 
notes  of  the  customer  and  also  by  chattel  mortgages  on  the 
fixtures.  It  is  not  expected  that  the  whole  of  the  loans 
will  ever  be  repaid  in  cash.  On  the  contrary,  it  is  expected 
that  when  the  fixtures  wear  out  the  saloon-keeper  will  prob- 
ably ask  for  a  new  loan  to  refurnish. 

For  repayment  the  brewery  must  trust  in  part  to  an 
arrangement  by  which  the  discount  actually  allowed  in  cash 
on  the  payment  of  the  customers'  weekly  beer  accounts 
shall  be  supplemented  by  an  additional  discount  to  be  applied 

22 


METHODS    AND    CONDITIONS    OF    SELLING 


23 


against  the  loan.  In  this  way  the  loan  account  should  be 
gradually  diminished  to  such  an  extent  that,  after  a  new 
loan  is  given,  the  ledger  balance  shall  not  be  greater  than 
the  original  loan.  In  some  cases  the  customers  do  not  know 
that  this  extra  discount  is  being  applied  against  their  loans. 
Indeed,  some  do  not  care,  because  they  never  intend  to  repay 
the  loan,  and  if  compelled  to  do  so  will  transfer  their  trade 
to  some  more  accommodating  brewery. 

Just  how  much  should  be  provided  for  the  purpose  of 
extinguishing  loans  is  a  matter  for  the  discretion  of  the 
brewery  manager,  and  the  auditor  is  confronted  with  a 
difficult  task  in  judging  of  the  value  of  loan  accounts.  He 
must  be  guided  by  several  considerations.  In  checking  over 
a  long  period  he  can  see  that  individual  loans  do  not  increase 
in  amount;  he  can  see  that  the  same  thing  is  true  of  the 
loan  accounts  as  a  whole,  taking  into  consideration  increases 
or  decreases  of  business  done;  and  he  can  ascertain  that 
the  total  amount  of  loans  standing  on  the  books  does  not 
exceed  a  certain  arbitrary  figure  per  barrel,  differing  in 
various  localities,  but  recognized  in  each,  which  is  the 
figure  that  other  breweries  are  willing  to  pay  to  obtain  the 
trade.  For  example,  in  New  York  City  it  has  been  gener- 
ally recognized  that  a  brewery  will  take  over  trade  from 
another  brewery,  paying,  to  clear  the  saloon-keeper  from 
liens  of  the  former  brewery,  a  sum  equal  to  about  $4  per 
barrel  of  annual  trade.  It  is  plain  that  the  value  of  a  loan 
account  is  dependent  upon  the  trade  which  it  controls. 

Loans  are  also  made  for  the  purchase  of  licenses,  but 
these  loans  are  treated  differently.  The  saloon-keeper  rec- 
ognizes his  obligation  to  repay  license  loans,  and  does  so 
in  regular  instalments.  Breweries  make  a  practice  of  ob- 
taining from  the  saloon-keepers  assignments  of  the  licenses, 
but  it  is  not  practicable  for  the  licenses  to  be  purchased 
by  the  breweries  in  their  own  names,  for  the  reason  that 


24 


BREWERY   ACCOUNTS 


a  violation  of  the  legal  restrictions  upon  saloons  is  consid- 
ered as  a  violation,  not  by  the  saloon,  but  by  the  owner  of 
the  license;  consequently,  if  the  licenses  were  in  the  name 
of  a  brewery,  a  violation  by  one  saloon-keeper,  entailing 
forfeiture  or  indorsement  of  license,  would  work  forfeiture 
or  indorsement  of  all  licenses  owned  by  the  brewery. 

Selling  Methods 

Lager  beer  is  sold  in  the  United  States  at  a  conventional 
price,  usually  $8  per  barrel,  subject  to  a  heavy  discount, 
amounting  to  from  20  to  40%.  As  previously  stated,  part 
of  this  discount  may  be  allowed  to  the  customers  when 
cash  payments  are  made,  and  part  be  retained  by  the  brew- 
ery, to  be  applied  against  the  customers'  loan  accounts. 

There  are  also  other  allowances  to  customers  which 
are  really  discounts,  and  no  part  of  the  accounting  should 
be  given  more  care  than  the  correct  treatment  of  such 
allowances. 

In  figuring  the  net  selling  price,  all  discounts  and  allow- 
ances, all  amounts  credited  to  the  loan  accounts,  and  rebates 
of  every  kind,  including  New  Year's  gifts^  credits  for  re- 
jected liquor,  and  deductions  allowed  by  collectors,  should 
be  treated  as  deductions  from  the  gross  selling  price. 

Ales  are  sold  at  a  lower  conventional  price  than  beer, 
the  discounts  being  smaller,  not  exceeding  20%.  In  other 
respects  the  remarks  as  to  deductions  from  selling  prices  of 
lager  beer  apply  also  to  ales.  It  should  be  noted,  however, 
that  ales  are  sold  on  longer  credit  than  lager  beer,  and 
are  not  made  the  basis  of  loans  to  such  a  great  extent. 
The  indebtedness  of  customers  who  purchase  ale  is,  there- 
fore, principally  on  their  current  liquor  accounts,  the  loans 
being  small;  lager  beer  accounts  should  be  paid  more 
promptly,  and  the  indebtedness  of  lager  beer  customers  is 
more  largely  in  respect  of  loans. 


METHODS    AND    CONDITIONS    OF    SELLING         25 

Brewery  Salesmen 

The  collection  of  money  and  sale  of  liquor  are  generally 
carried  out  by  the  same  employees,  and  the  personal  influ- 
ence of  these  employees  with  the  saloon-keepers  is  of  great 
value  in  controlling  trade.  Their  compensation  may  take 
any  one  of  three  forms :  (i)  A  fixed  salary  plus  expenses; 
(2)  a  fixed  salary  plus  expenses,  plus  commission;  or  (3) 
commission  only,  all  expenses  being  borne  by  the  collector. 

Where  commission  only  is  the  rule,  it  is  not  unusual 
to  allow  5%  on  the  amount  of  collections — not  on  the 
amount  of  sales.  Such  collections  are  collections  for  liquor 
only,  and  do  not  include  collections  on  account  of  licenses 
or  loans.  Small  saloons,  and  saloons  purchasing  ales,  while 
paying  a  higher  price  for  liquor,  are  so  exacting  as  to 
"spending  money"  (the  money  sp>ent  by  the  brewery  sales- 
man over  the  bar)  that  salesmen  do  not  care  to  handle  their 
trade  on  the  basis  of  commission  only. 

Where  salesmen  receive  salary  and  expenses,  with  or 
without  commission,  the  expenses,  consisting  largely  of 
spending  money,  should  be  passed  upon  by  the  manager. 
As  the  spending  money  is  admittedly  for  the  purpose  of 
buying  drinks  over  the  bar,  the  liability  to  abuse  is  evident. 

The  fixing  of  prices  should  be  by  the  manager,  and 
salesmen  should  have  no  power  to  change  prices.  The 
prices  so  fixed  should  be  permanently  recorded.  This  point 
will  be  referred  to  later  in  connection  with  customers' 
accounts. 

In  any  case,  the  expenses  and  salaries  of  collectors  should 
not  greatly  exceed  5%  of  the  net  sales,  unless  the  trade 
includes  a  considerable  proportion  of  ale  sales,  when  the 
cost  may  rise  to  6%. 

Cost  and  Selling  Prices 

It  is  a  remarkable  feature  of  the  brewery  business  that  the 


26  BREWERY    ACCOUNTS 

selling  prices  do  not  follow  increases  and  decreases  in  the 
cost  of  materials.  The  selling  prices  are  almost  immovably 
fixed,  and  the  brewer's  profit  or  loss  must  absorb  almost  the 
whole  of  the  fluctuations  in  the  prices  of  materials.  During 
the  ten  years  from  1902  to  1912  the  price  of  malt  doubled, 
increasing  the  cost  per  barrel  of  materials  about  60  cents, 
whereas  during  this  period  no  general  increase  in  selling 
price  has  taken  place. 

Controlled  Customers 

Breweries  having  sufficient  capital  are  adopting  tne  plan 
of  purchasing  saloons,  renting  them  to  customers  who  under- 
take to  sell  only  the  beer  brewed  by  the  owners. 

In  such  cases  the  loans  are  small  or  non-existent.  In- 
deed, for  desirable  locations,  tenants  have  paid  a  bonus 
for  the  privilege  of  entry.  Sales  and  collections  can  be 
made  at  greatly  reduced  expense ;  bad  debts  are  small ; 
credits  are  short;  and  the  prices  obtained  for  liquor  are 
higher. 

The  same  objects  are  attained  to  some  extent  by  brew- 
eries renting  saloons  and  subletting  them  jto  tenants  under 
the  restrictions  referred  to  above. 


CHAPTER  III 

CUSTOMERS'  ACCOUNTS 

The  discussion  of  manufacturing  accounts  has  set  forth 
the  manner  in  which  the  cost  of  Hquor  is  determined  and 
the  Liquor  Stock  account  estabHshed.  This  accounting  has 
been  kept  entirely  separate  from  the  accounts  covering  sale 
and  distribution,  having  no  logical  or  practical  connection 
therewith. 

Routine  of  Orders 

When  an  order  is  received  from  a  customer,  a  requisi- 
tion or  cellar  slip — Exhibit  13 — is  issued  by  the  order 
clerk,  and  is  filled  by  the  cellarman's  delivery  to  the  ship- 
ping clerk  of  the  liquor  ordered.  These  cellar  slips  may 
with  advantage  be  so  written  up  that  all  the  orders  to  be 
delivered  by  any  one  driver  shall  be  on  one  cellar  slip. 

The  shipping  clerk  affixes  the  proper  stamps  and  de- 
livers the  liquor  to  the  driver  with  receipt  forms — Exhibit 
14 — to  be  signed  by  the  customer.  These  receipt  forms  also 
have  spaces  for  records  of  returned  empties  and  a  detachable 
slip  on  which  the  driver  receipts  for  empties  returned. 

These  receipts  form  the  basis  for  the  entries  of  sales  in 
the  sales  books.  The  sales  books  should  be  compared  daily 
with  the  cellar  slips,  and  the  total  sales,  after  such  verifica- 
tion, be  entered  in  the  revenue  stamp  book  and  agreed  with 
the  stamps  canceled  and  affixed. 

2J 


28  BREWERY   ACCOUNTS 

Customers*  Pass-Books 

Most  breweries  supply  their  customers  with  pass-books, 
which  are  records  in  which  the  deliveryman  enters  all  beer 
delivered  and  all  empties  returned;  and  the  collectors  each 
week  extend  the  money  value  of  the  beer  delivered,  crediting 
cash  collected  and  discount  allowed  (not  including  discounts 
applicable  to  the  reduction  of  loan  accounts).  Any  special 
rebates  and  allowances  should  be  entered  only  on  presenta- 
tion of  the  pass-books  at  the  brewery  office,  and  when  all 
these  entries  have  been  made  the  balance  as  per  pass-book 
should  agree  with  the  balance  on  the  brewery  ledger.  Sep- 
arate pass-books  for  ale  and  lager  beer  should  be  provided, 
just  as  separate  accounts  are  provided  in  the  brewery  ledger. 

Combined  Sales  Book  and  Ledger 

A  convenient  form  of  sales  book  and  ledger  combined, 
suitable  for  city  beer  trade  for  customers  who  receive  sup- 
plies almost  daily,  is  shown  on  Exhibit  5.  This  book  is 
self-balancing,  and  saves  much  time  both  in  original  entry 
and  in  balancing  the  books  at  the  end  of  the  month.  With 
its  use  the  charges  to  customers  are  made  weekly,  on  the 
basis  of  liquor  supplied  during  the  week.  At  the  beginning 
and  end  of  each  month  the  portion  of  a  week  included  in 
the  month  is  to  be  treated  as  a  week. 

At  the  end  of  the  month  a  journal  entry  is  made,  trans- 
ferring from  Liquor  Stock  account  to  Cost  of  Liquor  Sold 
account  the  total  number  of  barrels  sold,  at  the  average 
cost  per  barrel  of  all  liquor  in  the  Liquor  Stock  accounts. 
Sales  accounts  are  then  credited  with  the  total  gross  sales 
as  shown  by  the  respective  sales  books. 

Reserve  for  Discounts 

As  the  discounts  to  be  allowed  are  so  large,  and  as  a 
portion  of  the  discount  may  be  retained  to  be  credited 


CUSTOMERS'    ACCOUNTS  29 

against  the  customer's  loan  account,  a  provision  for  pros- 
pective discount  must  be  made.  Several  methods  are  in 
use :  some  breweries  make  the  provision  on  the  basis  of 
an  estimated  average  selling  price ;  some  make  an  arbitrary 
provision  at  the  end  of  a  fiscal  year,  charging  against  the 
current  monthly  operations  the  amount  of  discount  allowed, 
not  on  monthly  sales,  but  on  actual  collections.  These 
methods  are  incorrect. 

The  most  satisfactory  method  is,  first,  to  charge  against 
Discount  Reserve  all  discounts  actually  allowed  on  collec- 
tions made;  second,  to  ascertain  by  examination  of  each 
customer's  account,  at  the  end  of  the  month,  the  amount 
of  discount,  including  credits  to  loan  accounts,  to  which 
the  customer  is  entitled ;  and  third,  to  make  a  journal  entry, 
charging  to  discount  expenses  and  crediting  to  the  reserve 
a  sufficient  sum  to  leave  the  reserve  with  a  credit  balance 
equal  to  the  total  amount  which  the  examination  of  cus- 
tomers' accounts  shows  to  be  allowable. 

At  suitable  intervals,  transfers  from  customers'  current 
accounts  to  loan  accounts  should  be  made;  these  transfers 
will  equal  the  amount  of  discount  which  the  brewery  allows, 
but  which  was  not  deducted  on  the  payment  of  cash  by  the 
customers.  Such  transfers  may  conveniently  be  made  by 
journal  entry,  debiting  Discount  Reserve  and  crediting  the 
customer's  loan  account,  no  entry  being  made  directly  to 
the  customer's  current  account.  If  this  be  done,  the  cus- 
tomer's current  account  will  be  credited  only  with  the 
amount  of  discount  actually  deducted  at  the  time  of  pay- 
ment for  liquor  supplied.  In  most  breweries  this  procedure 
is  followed. 

Out-of-Town  Trade 

The  trade  of  most  breweries  is  confined  to  the  imme- 
diate locality  of  the  plant,  but  some  have  a  large  outside 


30  BREWERY    ACCOUNTS 

agency  or  out-of-town  trade.  Where  the  amount  of  out- 
of-town  trade  is  small  these  sales  may  be  merged  with  the 
general  sales,  account  being  kept  of  the  freight  paid,  which, 
in  making  up  monthly  reports,  should  be  treated  as  a  deduc- 
tion from  the  gross  selling  price.  (See  Exhibits  i8  and 
19.)  Obviously,  the  selling  price  of  liquor  on  which  freight 
is  paid  should  be  higher  than  city  sales  by  the  amount  of 
freight. 

If  the  out-of-town  or  agency  trade  is  large,  it  is  pref- 
erable to  keep  separate  sales  books  and  general  ledger 
accounts  for  such  sales.  The  freight  and  agency  expenses 
should  then  be  treated  as  shown  on  Exhibits  18  and  19, 
so  that  the  net  selling  prices  for  ale  and  for  beer  for  city 
trade  may  be  compared  with  the  corresponding  prices,  after 
deducting  freight  paid,   for  country  trade. 

It  is  found  that  the  special  expenses  of  agencies,  other 
than  freight,  completely  neutralize  any  benefit  that  might 
be  expected  from  the  avoidance  of  the  selling  and  distribut- 
ing expenses  of  city  trade.  Country  trade,  therefore,  should 
produce  a  net  price,  after  deducting  freight,  equal  to  the 
price  obtained  in  the  city. 

Statements — Collections 

Statements  of  customers'  accounts  should  be'  forwarded 
at  least  once  a  month  by  mail.  Additional  statements  may 
be  furnished  to  the  collectors,  but  unless  statements  are 
sent  directly  to  the  customers  at  short  intervals  the  col- 
lectors will  be  in  a  position  to  defraud  the  brewery.  These 
statements  should  not  show  the  discount  to  which  a  cus- 
tomer may  be  entitled,  but  which  is  to  be  applied  against 
the  loan  account.  The  only  items  appearing  on  the  state- 
ment should  be  such  items  included  in  the  current  liquor 
account  as  the  customer  may  reasonably  be  expected  to 
pay. 


CUSTOMERS'    ACCOUNTS  3 1 

On  making  collections  the  collectors  should  report  on 
a  form  similar  to  Exhibit  15.  These  reports  may  be  placed 
in  a  binder  and  treated  as  a  receiving  cash  book,  or  they 
may  be  copied  out  into  a  bound  book.  In  consequence  of 
the  large  excess  of  the  number  of  items  of  cash  receipts 
over  the  number  of  cash  payments,  it  is  found  convenient 
to  have  separate  books  for  cash  receipts,  the  daily  totals 
being  transferred  to  the  general  cash  book. 

Postings  to  customers'  accounts  of  cash  received  and 
discount  allowed  may  be  made  either  directly  from  the 
collectors'  reports  (Exhibit  15)  or  from  the  copies  thereof 
entered  in  the  receiving  cash  book,  where  such  a  book  is 
kept. 


CHAPTER  IV 

SELLING  EXPENSES 

The  selling  expenses  of  a  brewery  include: 

Collectors'  and  salesmen's  salaries 
Collectors'  and  salesmen's  commissions 
Collectors'  and  salesmen's  expenses 
Bad  debts 

Signs  and  advertising 
Repairs  to  saloon  fixtures  and  beer  ma- 
chines and  pumps 
Office  salaries  and  expenses 
Brewers'  association  assessments  (on  per 

barrel  basis) 
Legal  and  sundry  expenses 

It  is  desirable  that  separate  accounts  for  each  of  the 
above  items  be  kept  in  the  general  ledger,  the  charges  being 
posted  from  the  voucher  register  and  cash  book.  At  the 
end  of  each  month  the  accounts  should  be  closed  out  to  the 
Selling  Expenses  account. 

Collectors'  Salaries,  etc. 

In  the  pay-roll  accounts,  both  those  of  collectors  and 
the  pay-rolls  included  in  the  office  expenses,  if  the  month 
does  not  terminate  on  the  same  day  as  the  pay-roll  period, 
the  amount  transferred  to  selling  expenses  should  take  up 

32 


SELLING   EXPENSES  33 

the  portion  of  a  pay-roll  period  that  overlaps,  leaving  a 
credit  balance  on  the  pay-roll  accounts  equal  to  the  amount 
so  overlapping.  This  credit  balance  is,  of  course,  **wages 
accrued.'* 

The  compensation  of  collectors  and  salesmen  has  already 
been  dealt  with.  The  bookkeeping  methods  in  relation 
thereto  do  not  materially  differ  from  those  used  for  the 
recording  of  other  salaries  and  wages,  and  need  no  comment. 

Bad  Debts 

Most  of  the  existing  statistics  relating  to  the  bad  debts 
of  breweries  are  misleading  and  unreliable.  This  is  so 
because,  in  the  absence  of  provision  for  the  extinction  of  the 
debt,  by  setting  aside  a  part  of  the  discount  allowed  on  sales 
or  otherwise,  losses  due  to  non-payment  of  loans  are  in- 
cluded therein,  notwithstanding  that  such  loans  were  nego- 
tiated with  the  knowledge  that  cash  repayment  would  not 
be  made.  No  loss  should  be  treated  as  a  bad  debt  except 
losses  shown  after  making  proper  provision  for  writing  off 
loans,  as  described  herein. 

It  is  not  possible,  however,  to  separate  bad  debts  com- 
pletely as  between  losses  on  beer  accounts  and  losses  on 
loan  accounts,  because,  avowedly  or  not,  the  partial  extin- 
guishment of  most  loans  is  to  be  looked  for  by  means  of 
transfers  of  credit  from  the  current  liquor  accounts,  so 
that  when  loan  losses  appear  they  may  be  due,  wholly 
or  in  part,  to  the  failure  of  the  brewery  to  recognize  the 
necessity  of  setting  aside,  out  of  the  receipts  for  liquor 
sold,  sufficient  to  extinguish  the  loan  within  a  reasonable 
period. 

The  figures  of  bad  debt  losses  given  in  Exhibit  17 
are  prepared  from  accounts  in  which  the  provision  for 
extinguishment  of  loans  has  been  made  as  described  in 
Chapter  II  of  the  present  volume. 


34 


BREWERY    ACCOUNTS 


The  accounting  for  bad  debts  should  be  by  means  of 
a  monthly  credit  to  Bad  Debt  Reserve  and  a  corresponding 
charge  to  Bad  Debt  Expense.  The  amount  so  reserved 
should  be  computed  on  the  basis  of  a  given  figure  per 
barrel  of  sales;  Exhibit  17  will  give  to  the  accountant 
opening  the  books  of  a  new  concern  a  fairly  correct  idea 
of  the  amount  which  should  be  set  aside  under  varying 
circumstances,  but  only  actual  experience  of  the  particular 
trade.,  covering  several  years,  will  enable  a  thoroughly 
reliable  estimate  to  be  made  of  the  requirements. 

In  recent  years  heavy  unforeseen  losses  have  been  occa- 
sioned by  prohibitive  laws,  which  cause  saloon  properties 
to  become  comparatively  worthless.  On  the  closing  by 
law  of  saloons  the  breweries  seldom  recover  more  than  a 
small  percentage  of  the  amounts  due  them.  Such  debts 
should  be  treated  as  special  losses,  and  cannot  well  be  pro- 
vided for  in  the  monthly  reserves. 

At  the  end  of  each  fiscal  period,  or  more  often  if  con- 
venient, ascertained  losses  should  be  charged  oflF  against 
the  reserves,  and  a  scrutiny  made  of  all  outstanding  accounts 
to  ascertain  that  the  reserve  is  sufficient,. 

Bad  debt  losses  occur  not  only  when  customers  become 
insolvent  and  abandon  business;  it  often  becomes  necessary 
for  breweries  to  abate  a  portion  of  a  customer's  indebted- 
ness, both  on  loan  and  current  liquor  accounts,  even  though 
the  customer  continue  in  business.  When  this  is  done,  such 
abatements  should  be  made  only  by  the  managers  and 
directors  of  the  brewery,  and  not  on  the  authority  of  any 
minor  officials. 

In  making  charges  to  bad  debt  account  it  must  be  re- 
membered that  provision  for  heavy  discounts  has  already 
been  made,  and  that  if  the  ledger  balance  of  a  customer 
is  to  be  written  off,  part  must  be  charged  against  the  dis- 
count reserve  and  part  against  bad  debt  reserve. 


SELLING   EXPENSES  35 

Signs  and  Advertising 

All  breweries  furnish  to  their  customers,  free  of  charge, 
signs  carrying  announcements  of  the  names  of  the  custom- 
ers jointly  with  the  advertisement  of  the  product  of  the 
brewery.  Such  signs  should  be  charged  to  expense,  not 
carried  as  assets.  It  is  obvious  that  nothing  material  could 
be  realized  on  their  sale  if  they  could  no  longer  be  used  in 
the  place  for  which  they  were  made. 

Advertising  may  be  a  very  large  item  of  expense,  some 
breweries  having  announcements  in  almost  all  the  publi- 
cations in  the  country.  Such  advertising,  however,  is  prin- 
cipally of  bottled  liquor,  and  is  primarily  chargeable  against 
the  bottling  accounts.  Nevertheless,  the  advertisement  of 
bottled  liquor  may  be  largely  for  the  purpose  of  bringing 
before  the  public  the  general  output  of  the  brewery,  in 
which  case  the  division  of  expense  between  the  bottling 
works  and  the  brewery  must  be  made  in  accordance  with 
the  circumstances. 

Few  breweries  make  any  direct  profit  from  bottling,  and 
many  admit  that  the  maintenance  of  a  bottling  plant  is 
justifiable  only  as  an  advertisement  of  the  brewery. 

The  charges  to  this  account  originate  in  the  voucher 
register. 


Repairs  to  Saloon  Fixtures 

All  repairs  to  saloon  fixtures  and  plant,  if  not  chargeable 
directly  to  the  customer,  should  be  immediately  written 
off  as  expense.  The  repairs,  consisting  of  new  piping  (ale 
and  beer  runs,  drainage  pipes,  etc.),  repairs  to  pumps  and 
fixtures,  ice-boxes,  etc.,  are  made  by  firms  who  maintain 
a  special  staff  for  that  work.  Very  little  repairing  is  done 
by  brewery  employees. 


36  BREWERY    ACCOUNTS 

The  charges  to  this  account  also  originate  in  the  voucher 
register. 

Office  Salaries  and  Expenses 

This  account  includes  the  usual  items  which  are  met 
with  in  office  expense  accounts  of  other  businesses.  It 
takes  up  the  salaries  of  all  clerks,  except  the  shipping  clerks, 
the  salary  of  the  latter  being  charged  against  distributing 
expenses.  The  charges  originate  in  the  cash  book  and 
voucher  register. 

Brewers'  Association  Assessments 

Brewers'  associations,  for  the  furtherance  of  the  interests 
of  brewers,  exist  throughout  the  United  States,  and  are 
maintained  by  assessments  of  a  fixed  charge  per  barrel  on 
the  sales  of  their  members. 

Summary  of  Selling  Accounts 

Beer  sold. — Sales  books  entered  from  delivery  receipts, 
checked  by  cellar  slips,  amounts  posted  to  customers'  led- 
gers, totals  credited  monthly  to  Sales  (general  ledger). 

Collections. — Reported  by  collectors  on  collection  reg- 
ister sheets  (Exhibit  15),  posted  therefrom  or  from  receiv- 
ing cash  book  to  customers'  accounts,  monthly  totals  posted 
therefrom  to  credit  of  controlling  account  of  customers' 
ledger. 

Commission  to  collectors. — Credited  monthly  to  collec- 
tors' accounts  on  basis  of  collections  made;  total  charged 
to  Selling  Expense  through  journal;  collectors'  accounts 
debited  from  time  to  time  with  amounts  advanced  on  ac- 
count, balance  due  paid  off  at  end  of  each  month. 

Expense  accounts. — Those  paid  in  cash  posted  directly 


SELLING   EXPENSES  37 

to  the  expense  accounts  from  analysis  of  the  Expense  col- 
umn in  general  cash  book ;  other  debits  obtained  from  analy- 
sis of  Expense  column  in  voucher  record,  such  expense 
accounts  closed  out  monthly  into  Selling  Expenses. 

Discounts. — Actual  amounts  allowed  on  cash  receipts 
charged  to  Discount  Reserve;  reserve  adjusted  monthly 
by  charge  to  Discount  Expense  of  a  sum  sufficient  to 
leave  the  reserve  with  a  credit  balance  equal  to  prospective 
requirements. 

Returned  beer. — Entered  in  separate  column  of  sales 
books,  posted  therefrom  to  credit  of  customers'  accounts, 
total  posted  monthly  to  debit  of  Sales  account  in  general 
ledger.  Do  not  deduct  Barrelage  Returned  from  Total 
Barrels  Sold  if  the  returned  beer  is  not  salable.  The  total 
sales  must  agree  with  total  stamps  used.  Moreover,  "re- 
turned" beer  is  frequently  a  device  of  saloon-keepers  to 
charge  to  the  brewery  stale  beer,  and  the  amount  credited 
by  the  brewery  is  practically  a  rebate. 

Special  allowances. — Any  special  allowances  should  be 
entered  in  a  special  allowance  book,  all  entries  to  be  initialed 
by  the  manager.  The  details  are  posted  to  credit  of  cus- 
tomers, the  totals  posted  monthly  to  debit  of  Discount 
Reserve. 

Cost  of  liquor  sold. — A  journal  entry  is  made  monthly, 
crediting  liquor  stock  accounts  and  charging,  respectively: 
Sales,  Beer,  City — Sales,  Ale,  City — Sales,  Beer,  Shipment 
— Sales,  Ale,  Shipment;  these  costs  of  liquor  sold  accounts 
remaining  open  until  the  end  of  the  fiscal  period,  when  they 
are  closed  out  into  the  general  trading  account. 

An  additional  journal  entry  is  made,  taking  up  the 
revenue  stamps  used  on  the  beer  sold. 

In  this  connection  it  may  be  remarked  that  stamps  must 
be  affixed  on  shipment,  even  though  the  shipment  be  to 
an  agency  of  the  brewery  and  the  beer  be  not  sold ;  in  such 


38 


BREWERY   ACCOUNTS 


cases  the  revenue  stamps,  as  per  revenue  stamp  book,  will 
not  show  the  same  balance  as  the  ledger  account  of  stamps, 
the  difference  being  the  stamps  affixed  to  unsold  liquor  at 
agencies.  This  offers  no  difficulty  if  the  accountant,  in  mak- 
ing the  agreement,  allows  $i  for  each  barrel  of  liquor  held 
in  stock  away  from  the  brewery. 


CHAPTER  V 

DISTRIBUTING   EXPENSES 
The  items  included  under  distributing  expenses  are : 

Wages,  drivers,  stablemen  and  shipping 

clerks 
Repair  of  vehicles 
Tolls,  ferriage  and  sundries 
Coopers  and  repairs  to  cooperage   (not 

replacements) 
Horse-feed  and  supplies  and  gasoline 
Replacement  of  cooperage 
Depreciation  of  horses  and  of  auto-trucks 

Each  of  the  first  four  items  should  have  a  separate  gen- 
eral ledger  account,  to  be  closed  out  at  the  end  of  each 
month  by  a  charge  to  Distributing  Expenses.  Horse-Feed 
and  Supplies  is  an  inventory  account,  and  the  amount  cred- 
ited to  it  and  debited  to  Distributing  Expense  should  be  the 
value  of  feed  and  supplies  consumed  during  the  month. 

The  cost  of  replacement  (not  repairs)  of  cooperage, 
which,  as  stated  herein,  may  be  io-i2ths  of  i%  per  month, 
equivalent  to  io%  per  annum,  should  be  charged  to  Dis- 
tributing Expenses,  and  credited  either  directly  against  the 
asset  Floating  Cooperage  or  to  a  reserve  for  depreciation, 
the  credit  to  Cooperage  account  being  left  till  the  end  of 
the  fiscal  period. 

A  similar  charge  to  Distributing  Expenses  and  credit 

39 


40  BREWERY   ACCOUNTS 

to  the  assets  Horses  and  Auto-Trucks  should  be  made 
monthly.  The  rate  of  depreciation  on  horses  will  vary- 
widely  with  differing  conditions  of  roads,  etc.,  and  there 
is  not  yet  sufficient  data  at  hand  to  show  conclusively  what 
rate  of  depreciation  is  necessary  on  auto-trucks.  Probably 
a  life  of  five  years  is  the  most  that  can  be  expected  of  the 
motor-trucks  now  on  the  market. 

Care  of  Packages — Replacements 

Unless  customers  are  required  to  account  strictly  for 
empty  packages,  the  loss  thereon  may  be  large.  An  account 
of  empties  should  be  kept  in  the  pass-book  of  each  customer, 
a  duplicate  account  being  kept  at  the  brewery.  From  time 
to  time  the  pass-books  should  be  called  in  by  the  brewery 
and  compared  with  the  brewery  books  in  this  and  other 
respects. 

Empty  beer  kegs  and  barrels  have  many  possibilities 
other  than  the  containing  of  liquor.  They  make  admirable 
tree-tubs;  they  have  been  used  for  mooring-buoys ;  and  not 
a  few  have  been  used  to  celebrate  sundry  occasions  by  bon- 
fires. Customers  soon  know  whether  they  may  safely 
neglect  to  return  packages,  and  quickly  adapt  themselves  to 
the  requirements  of  the  brewery. 

It  is  impracticable  to  obtain  a  physical  inventory  of 
packages  of  a  brewery  in  active  operation.  In  Europe  it 
is  customary  to  number  the  individual  packages  and  to  keep 
a  record  for  each,  showing  its  whereabouts.  This  is  not 
necessary  if  proper  care  be  taken  to  collect  empties.  It  has 
been  found  that  where  the  drivers  use  proper  diligence  an 
annual  depreciation  of  io%  of  the  ledger  balance  covering 
floating  cooperage  suffices  to  keep  the  balance  approximately  * 
stationary  at  a  figure  equal  to  33  cents  per  barrel  of  annual 
trade.  That  is  to  say,  for  a  plant  brewing  400,000  barrels 
per  annum  the  book  value  of  packages  would  be  about 


DISTRIBUTING   EXPENSES  41 

$133,333,  ^^^  the  annual  cost  of  replacements  (not  includ- 
ing repairs)  about  $13,333. 

This  would  indicate  that  the  packages  in  use  have  a 
total  capacity  of  33,333  barrels,  equal  to  one  month's  trade, 
which  is  probably  very  close  to  the  truth.    The  figures  are: 

Cost  of  new  packages :    ^  barrel  at $3.50 

Fittings  at .50 


$4.00 


33,333  barrels  =  66,666  half  barrels 

New  cost,  $4  X  66,666 $266,664.00 


Current  value  ==  ^4  = $133,332.00 


Depreciation,  $13,333  per  year  ^  20  cents  per  ^  barrel 
per  year,  or  i^  cents  cost  of  replacements  for  each  time 
that  the  package  is  sent  out. 

About  80%  of  the  trade  is  done  in  J^  barrels. 

All  this,  in  effect,  indicates  that  the  packages  have  an 
average  active  life  of  twenty  years,  going  out  and  returning 
once  every  month. 

To  keep  records  in  the  European  manner  would  entail 
the  making  for  each  package  of  500  entries,  on  different 
dates;  the  saving,  if  any,  resulting  from  this  close  account- 
ing for  packages  could  be  only  the  additional  life,  over 
twenty  years,  which  might  be  obtained  for  a  package. 
Under  American  conditions,  500  book  entries  cannot  be 
made  for  the  value  of  a  package  twenty  years  old. 

The  figures  given  above  for  cost  of  replacement  will 
not  be  changed,  even  though  the  view  be  taken  that  the 
packages  in  use  are  more  or  less  than  sufficient  to  contain 


42  BREWERY    ACCOUNTS 

one  month's  supply.  If,  for  example,  it  be  estimated  that 
packages  sufficient  to  contain  only  two  weeks'  supply  are 
in  use,  then  the  rate  of  depreciation  sufficient  to  keep  the 
asset  stationary  in  amount  will  become  20%  instead  of 
10%,  but  this  rate  of  depreciation  is  computed  on  an  asset 
only  half  as  great  as  that  contemplated  in  the  figures  given. 
In  either  case  the  depreciation  would  amount  to  $13,333 
per  annum. 

So  far  as  the  profit  and  loss  feature  of  the  accounting  is 
concerned,  the  vital  fact  is  that  a  depreciation  equivalent 
to  10%  per  annum  on  packages  containing  one  month's 
supply,  or  40%  on  packages  containing  one  week's  supply, 
will  suffice,  under  good  management,  to  keep  the  asset 
account  stationary. 

Under  these  circumstances,  the  cost  of  replacements  per 
barrel  of  annual  trade  is  very  close  to  3  cents,  and  as  the 
trade  is  done  principally  in  J/2  barrels  the  cost  will  be  i^ 
cents  per  package  for  every  time  it  is  sent  out.  Obviously, 
if  only  two  weeks'  packages  are  in  use,  the  number  of  times 
each  package  will  be  sent  out  in  its  life  of  ten  years  will 
be  equal  to  the  number  of  times  it  would  be  sent  out  in 
its  life  of  twenty  years,  supposing  packages  sufficient  to 
contain  a  month's  supply  were  in  use. 

Summary  of  Distributing  Expenses 

Wages. — Charges  obtained  from  distribution  of  pay-roll 
accounts,  which  may  best  be  made  through  the  cash  book. 

Repair  of  vehicles. — Charges  obtained  through  voucher 
register.     Cover  actual  current  repairs. 

Tolls,  ferriage  and  sundries. — ^Charges  obtained  prin- 
cipally through  petty  cash  book. 

Coopers  and  cooperage  supplies. — Coopers'  wages 
charged  from  pay-roll  distribution ;  supplies  charged  through 


DISTRIBUTING   EXPENSES  43 

voucher  register.  This  does  not  include  replacements  of 
cooperage. 

Horse-feed,  supplies,  gasoline. — The  charges  to  Distrib- 
uting Expense  are  obtained  by  monthly  journal  entry,  charg- 
ing this  account  and  crediting  the  corresponding  inventory 
accounts  with  the  month's  consumption. 

Replacement  of  cooperage. — Provided  for  by  a  monthly 
reserve,  equivalent  to  either  3  cents  per  barrel  of  sales  or 
to  io-i2ths  of  1%  of  the  ledger  balance.  These  rates  are 
equivalent  in  the  long  run,  but  the  asset  account  should  be 
watched,  and  if  it  shows  a  tendency  to  grow  in  amount  the 
provision  for  replacement  should  be  increased.  At  the  end 
of  a  fiscal  period  the  reserve  set  up  for  this  purpose  should 
be  written  off  against  the  asset.  This  refers  to  floating 
cooperage  only. 

Renewals  and  depreciation  of  horses  and  vehicles. — Pro- 
vided for  in  the  same  manner  as  floating  cooperage. 


CHAPTER  VI 

ADMINISTRATIVE   EXPENSES 

Administrative  expenses  include  salaries  of  president  and 
directors  and  sometimes  of  treasurer  and  secretary,  fees  of 
directors,  and  cost  of  auditing. 

If,  in  addition  to  their  duties  as  officers,  any  of  these 
perform  in  the  brewery  or  in  the  office,  duties  which  might 
be  performed  by  ordinary  salaried  employees — duties  con- 
nected directly  with  selling  or  manufacturing  the  product — 
a  corresponding  portion  of  their  salaries  should  be  charged 
against  the  selling  and  manufacturing  accounts. 

Elimination  of  Manufacturing  and  Selling  Expenses 

It  should  be  so  arranged  that  Administrative  and  Man- 
agement Expense  will  include  nothing  that  is  directly  a 
part  of  the  cost  of  manufacture  and  sale.  The  practice  of 
bringing  into  General  and  Administrative  Expenses,  ex- 
penses which  are  strictly  dependent  upon  business  done,  such 
as  salaries  of  clerks  employed  in  keeping  manufacturing  and 
customers'  accounts,  is  to  be  deprecated.  The  employment 
of  an  adequate  office  staff  is  intended  to  secure  economy 
in  the  operation  of  the  plant;  its  cost  should  be  charged 
directly  against  operations,  so  that  comparison  may  be  made 
to  see  whether  it  pays  to  carry  accounting  into  rhinute 
detail.  Neglect  to  charge  directly  against  operations  the 
office  salaries  and  expenses  may  be  responsible  for  the  fail- 
ure of  breweries  to  recognize  the  lack  of  economy  in  keeping 

44 


ADMINISTRATIVE   EXPENSES 


45 


separate  records  by  number  of  each  package,  as  described 
herein,  as  it  assuredly  has  been  responsible  for  the  adoption 
by  many  factories  of  elaborate  but  unpractical  cost  systems, 
most  of  which  fail  to  take  into  account  the  cost  of  the  system 
itself. 

Entry  of  Expenses 

An  accurate  estimate  of  the  annual  cost  of  administra- 
tive expenses  can  be  made,  and  a  monthly  charge  to  Admin- 
istrative Expense,  with  a  corresponding  credit  for  Reserve 
for  Directors'  and  Officers'  Salaries  and  Fees,  should  be 
made.  There  will  then  remain  at  the  end  of  each  month 
on  the  latter  account  a  credit  balance  representing  accrued 
fees  and  salaries. 

It  may  appear  that  the  provision  by  journal  entry  for 
accrued  and  accruing  discounts,  depreciation,  taxes,  insur- 
ance, etc.,  and  the  monthly  journalizing  of  sales,  stamps 
used,  liquor  removed  from  stock,  and  the  transfers  of  items 
of  expense  to  general  manufacturing,  selling  and  distributing 
expense,  entails  much  work.  This  is  not  found  to  be  so; 
the  entries  are  similar  each  month,  some  identical  in  amount 
(taxes,  insurance,  provision  for  depreciation,  etc.),  and  the 
remainder  changing  only  in  the  figures,  not  in  the  form. 
It  may  be  found  economical  to  prepare  a  number  of  forms 
in  blank,  taking  up  the  entries  which  should  be  made  each 
month  and  filling  in  the  details  as  required.  These  forms 
may  even  be  printed,  and  after  filling  may  be  posted  directly 
and  placed  in  a  binder  for  reference,  without  entry  in  the 
journal.  This  has  been  done  without  any  objection  appear- 
ing, and  the  preparation  in  advance  of  a  form  containing 
all  the  regular  monthly  transfers  will  go  far  to  prevent  the 
accidental  omission  of  entries. 


CHAPTER  VII 

COUNTRY   BREWERIES 
Conditions  of  Country  Trade 

In  ordinary  city  trade  it  is  undesirable  that  customers 
should  be  allowed  to  know  what  other  customers  purchase; 
it  is  therefore  necessary  that  each  of  the  drivers'  slips 
should  contain  information  as  to  the  beer  to  be  delivered  to 
only  one  customer.  City  deliverymen  are  not  allowed  to 
collect  cash,  and,  as  stated  previously,  the  city  trade  is 
dependent  largely  upon  the  personal  relations  between  cus- 
tomers and  collectors. 

It  is  possible,  in  country  trade,  to  adopt  other  and  much 
more  economical  methods,  especially  where  the  trade  is  con- 
trolled by  ownership  of  saloons  or  otherwise.  Customers 
are  more  widely  separated,  and  have  not  the  same  close 
rivalry;  competition  is  less  keen,  and  delivery  drivers  are 
able  to  take  care  of  collections  and  to  take  orders  for 
supplies. 

Deliveryman's  Report 

In  such  cases  a  form  similar  to  Exhibit  i6  may  be  used. 
On  this  form  is  first  entered  the  liquor  to  be  delivered 
during  the  day  by  one  driver;  each  customer  signs  in  the 
proper  place  for  the  beer  received  by  him ;  the  driver  enters 
on  the  sheet  the  amount  of  cash  collected  and  the  number 

46 


COUNTRY     BREWERIES  47 

of  empties  returned.  On  returning  it  to  the  brewery  office 
the  money  amount  of  sales  is  filled  in  and  the  form  placed 
in  a  binder,  where  it  forms  a  cash  receiving  book  from 
which  are  posted  the  cash  credits  to  customers,  and  a  sales 
book  from  which  are  posted  debits  to  customers.  The  totals 
of  these  sheets  are  summarized  at  the  end  of  the  month 
and  posted  to  the  proper  general  ledger  accounts. 

Where  saloons  are  so  thoroughly  controlled  that  this 
sheet  can  be  used  and  the  services  of  salesmen  and  col- 
lectors dispensed  with,  the  saving  of  expense  may  amount 
to  60  cents  per  barrel. 


CHAPTER  VIII 

MONTHLY  REPORT  OF  OPERATIONS 
Forms  Used 

In  Chapter  XV  are  shown  three  forms  (iSa,  iSb  and 
1 8c)  suitable,  respectively,  for  breweries  (a)  whose  product 
is  either  of  one  kind  only,  or  of  qualities  so  nearly  aHke 
that  no  separation  of  costs  is  needed,  and  whose  out-of-town 
trade  is  so  small  that  it  may  be  merged  with  the  general 
trade;  (b)  whose  costs  and  sales  of  beer  and  ale  are  to  be 
separated;  (c)  whose  costs  and  sales  are  to  be  separated, 
not  only  as  between  ale  and  beer,  but  as  between  shipment 
and  city  trade. 

These  reports  are  so  prepared  as  to  show  at  a  glance 
the  general  results  of  trading;  the  details  of  expenses  and 
costs  being  given  on  supplementary  schedules.  This  form 
is  much  more  acceptable  and  intelligible  to  directors  than 
statements  in  which  the  general  results  of  trading  are  lost 
in  a  mass  of  detail;  yet  the  supplementary  schedules  show 
with  a  minuteness  not  practicable  in  a  single  statement  the 
details  of  expenses. 

In  every  case  the  principal  accounts  and  schedules  should 
have  parallel  columns  for  corresponding  figures  of  other 
periods;  these  are  not  shown  on  the  exhibits,  but  their 
arrangement  will  be  obvious. 

In  order  to  secure  sufficient  details  without  burdening 
the  voucher  register  with  unnecessary  columns  and  the  gen- 
eral ledger  with  many  accounts,  it  is  desirable  that  sub- 

48 


MONTHLY    REPORT    OF    OPERATIONS  49 

divisions  of  certain  accounts  be  indicated  by  letter ;  thus,  in 
the  Steam  and  Power  account  the  items  in  the  voucher 
register  may  be ,  distinguished  by  letters  "a,"  "b,"  "c,"  etc. 
The  total  of  the  Steam  and  Power  column  in  the  voucher 
register  may  appear  thus: 

Total,     $8,261.00 


a  $4,100.00  All  being  posted  under  their 

b  2,620.00  respective    letters    to    Steam 

c  672.00  and    Power   account   in   the 

d  869.00  ledger. 


CHAPTER  IX 

BOTTLING  ACCOUNTS 
Treatment  of  Bottling  Accounts 

Sales  of  bottled  beer  and  ale  are  seldom  made  at  a  profit 
if  the  liquor  be  charged  to  the  bottling  department  at 
ordinary  selling  prices.  Except  as  an  advertisement,  most 
bottling  plants  are  financial  failures. 

There  seems  to  be  no  advantage  whatever  in  conduct- 
ing the  bottling  books  as  part  of  the  accounts  of  a  brewery; 
the  disadvantages  are  many.  Thus,  customers'  accounts  are 
small  and  numerous;  the  sales,  deliveries  and  collections 
are  differently  conducted ;  the  personnel  is  entirely  separate ; 
and  instances  in  which  a  customer  buys  both  bottled  and- 
bulk  goods  of  one  make  are  rare  indeed.  The  books  of  a 
bottling  plant  have  more  of  the  characteV  belonging  to  a 
retail  business,  and  to  handle  the  mass  of  petty  detail  which 
occurs  in  bottle  trade  in  the  manner  found  suitable  for  the 
business  of  a  brewery  would  be  a  serious  waste  of  effort. 

For  all  these  reasons  it  has  proved  more  economical 
for  breweries  to  charge  beer  to  bottling  works  in  the  same 
manner  as  to  an  outside  customer,  and  for  the  bottling 
works  to  keep  its  own  accounts,  make  its  own  collections, 
and  prepare  a  separate  trading  and  profit  and  loss  account. 


so 


CHAPTER  X 

ASSETS— PLANT   AND   EQUIPMENT 

Buildings,  Brewery 

The  valuation  of  these  does  not  offer  any  features  dif- 
fering from  those  obtaining  in  other  lines  of  business.  The 
rate  of  depreciation  to  be  written  off  will  vary  according 
to  locality  and  class  of  construction;  some  idea  of  the  rate 
necessary  may  be  gathered  from  an  inspection  of  brewery 
buildings  that  have  been  operating  under  similar  conditions. 
Many  brewery  structures,  if  of  brick,  steel  and  cement,  will 
continue  in  use  for  fifty  years. 

Outside  Property 

Outside  real  estate,  which  will  be  principally  saloon 
property,  should  be  taken  up  at  cost,  less  a  rate  of  depre- 
ciation somewhat  greater  than  that  necessary  to  amortize 
the  value  of  the  building  over  the  period  of  its  probable 
life.  Most  saloon  properties  have  a  value  due  in  part  to 
their  suitability  for  this  particular  use.  Changes  in  legisla- 
tion and  movements  of  population,  etc.,  are  likely  to  affect 
adversely  such  properties,  and  the  depreciation  should  aim 
at  eventually  reducing  the  book  value  to  the  figure  at  which 
the  property  could  be  sold  for  other  purposes. 

Machinery  and  Permanent  Plant  (Not  Buildings) 

Under  this  head  may  be  included  ''chip  casks"  and  other 
large  fixed  cooperage,  tanks,  and  the  usual  brewing  ma- 
chinery, as  well  as  boilers,  engines  and  electric  plant.     It 

51 


52 


BREWERY    ACCOUNTS 


does  not  include  floating  cooperage,  wagons,  horses,  auto- 
trucks, nor  saloon  fittings. 

The  asset  should  not  largely  exceed,  for  each  barrel  of 
annual  output,  $1.50.  If  a  plant  be  used  principally  for 
the  production  of  ales  this  figure  is  too  high,  because  a 
much  larger  quantity  of  ale  may  be  produced  in  a  given 
time  than  of  lager  beer.  If  the  brewery  be  not  operated 
to  its  fair  capacity,  this  figure  must  be  applied  not  to  the 
actual  output  but  to  the  normal  capacity.  Five  per  cent 
annual  depreciation  on  the  original  cost  is  sufficient,  if 
usual  repairs  are  made  and  charged  to  expense  as  incurred. 

Floating  Cooperage 

The  packages  in  use,  as  already  stated,*  should  have  a 
capacity  of  about  one  month's  sales  if  the  brewery  be  en- 
gaged principally  in  trade  in  the  city  where  the  plant  is 
located.  The  book  value  should  be  one-half  of  the  new 
cost  of  this  quantity  of  packages.  As  new  packages  are 
constantly  being  purchased  to  replace  worn-out  packages, 
the  whole  stock,  on  the  average,  will  be  half  worn  out. 

A  brewery  may  own  more  packages  than  it  needs,  but 
idle  packages  deteriorate  and  tie  up  capital,  and  for  these 
reasons  the  packages  are  kept  as  low  as  possible. 

If  a  brewery  claims  a  value  for  its  packages  largely  in 
excess  of  half  the  new  cost  of  packages,  with  a  capacity  of 
one  month's  sales,  the  auditor  should  not  accept  the  figures 
without  careful  verification. 

*See  Chapter  V. 


CHAPTER  XI 

ASSETS— INVENTORY  AND  SALOON  FITTINGS 

Inventory,  Liquor  and  Materials 

The  materials  on  hand,  being  kept  in  original  packages, 
may  easily  be  verified  by  physical  examination. 

The  liquor  on  hand  must  be  estimated  to  some  extent, 
as  part  of  the  stock  will  be  in  tanks  and  vats.  The  auditor 
should  not  fail  to  compare  the  sales  and  stock  of  liquor  on 
hand  with  the  records  in  the  internal  revenue  stamp  book. 
Government  inspectors  check  up  the  amount  of  stamps  pur- 
chased and  used,  their  figures  being  obtained  from  the  rec- 
ords of  stamps  sold  at  the  internal  revenue  office  of  the 
district ;  there  should  not  be  any  difference  whatever  between 
the  records  of  the  government  inspector  and  the  brewery 
figures  of  liquor  brewed  and  shipped. 

Although  the  revenue  stamps  are  not  of  marketable 
value  they  should  be  counted,  not  to  prevent  stealing  of 
stamps,  but  to  see  that  no  stamped  beer  has  been  sent  out 
without  a  proper  record  appearing  on  the  books.  The 
stamps  on  hand  should  agree  with  the  balance  of  the  internal 
revenue  stamp  book.* 

Saloon  Fittings 

This  asset  is  liable  to  much  inflation.  When  fittings 
are  purchased  their  value  should  be  debited  to  the  customer's 
loan  account,  and  in  addition  chattel  mortgages  and  notes 
of  customers  should  be  taken  as  collateral  security.     If  this 

*But  see  page  38. 

S3 


54 


BREWERY    ACCOUNTS 


be  done,  the  amount  spent  on  fixtures  will  not  be  overlooked 
in  computing  the  amount  of  loan  allowed  to  individual 
customers. 

Some  breweries,  however,  carry  the  fittings  themselves 
as  the  asset,  ignoring  the  collateral  security,  and  not  recog- 
nizing the  debt  by  the  customer  on  account  of  the  fittings 
supplied  to  him.  In  such  cases  the  asset  cannot  in  any 
way  be  verified,  or  even  roughly  estimated,  by  the  auditor. 
In  making  an  analysis  of  the  account  the  auditor  may, 
however,  furnish  to  the  brewery  officials  an  approximate 
statement  of  the  value  at  which  each  customer's  fittings  are 
carried,  and  with  a  little  tact  the  brewery  owners  may 
obtain  some  idea  of  the  real  value  of  the  fittings.  Where 
this  has  not  been  done  for  some  years,  it  will  generally  be 
found  that  fixtures  which  are  still  carried  on  the  books  have 
long  ago  found  their  way  to  the  junk  heap. 

If,  however,  the  fittings  be  charged  at  once  to  the  cus- 
tomer, and  the  debt  treated  as  a  loan  account,  there  will 
exist  a  lien  on  the  business  which  will  be  recognized  by 
brewers  who  desire  to  obtain  the  trade;  and  if  notes  cover- 
ing the  loan  have  been  obtained  the  lien  becomes  a  legal 
obligation  of  the  customer. 

If  the  fittings  be  taken  as  the  property  of  the  brewery, 
a  customer  desiring  to  make  a  change  to  another  brewery 
need  only  turn  over  to  the  first  brewery  the  fittings,  which 
when  torn  out  are  valueless,  obtaining  from  the  new  brew- 
ery new  fittings. 

On  the  whole,  it  is  most  satisfactory  to  include  in 
brewery  assets  no  fittings  except  those  on  hand  at  the 
brewery. 


CHAPTER  XII 

ASSETS— CUSTOMERS'  ACCOUNTS 

Lager  Beer  Accounts 

In  accordance  with  the  custom  of  the  trade,  lager  beer 
accounts  should  be  paid  promptly,  and  statements  should  be 
sent  weekly  to  customers.  Circularization  of  the  customers 
by  auditors  is  not  practicable,  because  the  customers  are 
usually  so  ignorant  of  modern  business  methods  that  serious 
offense  is  taken  if  inquiries  be  addressed  to  them  relative 
to  their  debts. 

In  deaHng  with  customers  of  a  brewery,  auditors  should 
recognize  that  the  relations  of  breweries  with  their  custom- 
ers are  of  a  peculiarly  personal  nature,  and,  as  already  stated, 
that  the  trade  is  held  largely  through  the  personal  influ- 
ence of  the  collectors  with  whom  the  customers  come  in 
contact. 

Ale  Accounts 

Ale  accounts  are  paid  less  promptly  than  lager  beer 
accounts.  The  liquor  is  put  up  in  larger  packages,  has 
a  slower  sale,  will  keep  longer,  and  the  custom  of  the  trade 
is  to  allow  longer  credit.  For  this  reason,  customers  who 
have  both  beer  and  ale  trade  should  be  given  separate  ledger 
accounts  for  each.  Indeed,  it  is  preferable  to  have  separate 
customers  ledgers  for  ale  and  lager  beer  sales. 

Customers'  Loan  Accounts 

Customers'  loan  accounts  are  of  two  kinds :  those  cover- 

SS 


56  BREWERY   ACCOUNTS 

ing  general  loans  for  the  purchase  of  fixtures,  etc.,  and 
loans  for  the  purchase  of  licenses. 

The  managers  of  breweries  should  have  personal  charge 
of  the  loans  for  general  purposes,  and  should  authorize  all 
new  loans,  receive  all  repayments  on  account  of  such  loans, 
and  ascertain  that  proper  discount  or  other  provision  is 
made  for  the  ultimate  extinction  of  the  amounts  loaned. 

License  moneys,  however,  are  collected  weekly  by  the 
same  collectors  who  collect  for  beer,  and  where  license 
and  general  loans  are  merged  in  one  account  it  is  not  easy 
to  prevent  collectors  from  appropriating  license  moneys. 

License  loans  should  never,  under  any  circumstances,  be 
allowed  to  fall  seriously  into  arrear.  In  order  to  ascertain 
that  all  license  installments  are  promptly  paid,  the  ledger 
in  which  these  are  entered  should  be  separated  from  the 
general  loan  ledger,  and  may  with  advantage  have  a  form 
similar  to  Exhibit  9. 

It  has  been  stated  before  that  the  discount  to  be  allowed 
to  customers,  which  really  fixes  the  selling  prices,  should 
be  determined  by  the  manager  and  made  the  subject  of  a 
permanent  record. 

Verification  of  Prices 

At  the  close  of  a  fiscal  period  the  customers'  ledger 
should  be  examined  to  ascertain  that  the  average  net  price 
actually  paid  by  the  customer  is  in  accordance  with  the 
price  fixed  by  the  manager.*  This  net  price  should  be  com- 
puted by  dividing  the  actual  cash  received,  less  the  amount 
of  credit  transferred  from  the  liquor  account  to  the  loan 
account,  by  the  number  of  barrels  paid  for.  This  will 
include,  as  deductions  from  net  selling  price,  all  discounts 
applicable  to  loan  account,  all  allowances  made  by  collectors, 
and  all  returned  beer.     Experience  shows  that  in  a  well- 

*See  page  25. 


ASSETS— CUSTOMERS'  ACCOUNTS        57 

managed  brewery  this  check  on  prices  will  indicate  with 
certainty  any  extra  allowances  amounting  to  as  much  as 
1%  of  the  sales,  and  thus  show  any  fraud  arising  from 
improper  entries  of  credit  for  discount  or  allowances. 

Verification  of  Loans 

The  verification  of  general  loans  offers  much  difficulty. 
The  loan  as  shown  on  the  books  seldom  agrees  with  the 
figures  of  the  customer  (if  he  takes  the  trouble  to  keep 
any)  because  it  is  customary  for  breweries  to  apply  against 
the  loans,  without  the  knowledge  of  the  customer,  extra 
discount  and  allowances.  The  loans  are  also  reduced  from 
time  to  time  by  writing  off  a  part  to  bad  debts.  In  such 
cases  the  customer  is  not  informed,  because  if  any  change 
were  made  in  the  relations  of  the  customer  with  the  brewery 
it  would  be  of  advantage  to  have  a  lien  for  as  large  an 
amount  as  possible.  It  follows  that  statements  of  the  loan 
accounts  cannot  be  sent  out  for  verification. 

The  auditor  can  see  ( i )  that  new  loans  are  duly  author- 
ized, (2)  that  the  total  of  each  individual  customer's  account 
does  not  exceed  $4  to  $4.50  per  barrel  of  annual  trade,  and 
(3)  that  individual  loans  are  not  gradually  increasing.  He 
can  also  see  that  agreements  to  pay  off  loans  in  a  speci- 
fied manner  (such  agreements  sometimes  exist)  are  being 
carried  out. 

Where  a  brewery  has  operated  for  a  considerable  time, 
a  most  valuable  check  will  be  found  in  a  comparison  of 
the  total  outstanding  loans  with  the  barrelage  for  each 
year.  A  similar  comparison  of  the  total  of  outstanding 
beer  accounts  should  also  be  made.  Even  without  inten- 
tional falsification  of  accounts,  the  value  of  loans  may  be- 
come largely  overstated  by  failure  to  make  proper  provision 
for  partial  uncollectability  of  loans  made  to  customers  who 
continue  in  business  and  make  their  payments  of  beer  ac- 


58 


BREWERY    ACCOUNTS 


counts  promptly.  Led  by  desire  to  make  as  good  a  show- 
ing as  possible,  managers  are  often  reluctant  to  write  off 
any  part  of  such  accounts  at  the  expense  of  current  profits. 
It  being  understood  that  these  accounts  will  never  be 
fully  repaid  in  cash,  and  that  they  are  of  value  principally 
as  a  means  of  holding  trade,  it  is  obvious  that  the  amount 
of  trade  done  should  bear  a  proper  ratio  to  the  amount  of 
loan. 

Collateral  for  Loans 

Examination  of  chattel  mortgages  given  as  collateral 
for  loans,  and  of  the  notes  given  for  the  same  purpose,  is 
of  little  value  to  the  auditor.  Even  when  saloon-keepers 
pay  their  notes  and  chattel  mortgages  in  full,  they  frequently 
omit  to  see  that  the  documents  are  returned  to  them  or 
canceled,  and  where  a  part  of  a  loan  is  repaid  or  canceled 
by  charge  to  bad  debts  or  application  of  discount,  it  is 
seldom  that  the  customer  ascertains  that  proper  indorse- 
ment is  made  on  the  notes.  Breweries  usually  have  on  hand 
notes  and  chattel  mortgages  to  an  amount  largely  in  excess 
of  the  book  total  of  loans  outstanding. 


CHAPTER  XIII 

ASSETS— BILLS    RECEIVABLE   AND    CASH    ON 

HAND 
Bills  Receivable 

In  most  breweries  the  notes  given  by  customers,  both 
on  account  of  loans  and  current  liquor  accounts,  are  treated 
as  collateral  only,  not  credited  to  customers  nor  taken  up 
as  bills  receivable. 

This  seems  a  proper  course,  since  saloon-keepers  give 
notes  without  any  serious  intention  of  paying  them  at  ma- 
turity. If,  however,  any  bills  receivable  be  carried  among 
the  assets  of  a  brewery,  the  auditor  should  ascertain  that 
they  are  given  for  beer  accounts  and  not  as  security  for 
loans;  that  they  are  not  overdue;  and,  if  demand  notes, 
that  they  have  not  been  in  existence  for  an  unreasonable 
length  of  time.  If  possible,  the  auditor  should  follow  them 
to  their  final  disposition. 

The  total  amount  should  be  small;  in  no  case  within 
the  records  available  to  the  writer  has  the  total  of  notes 
receivable,  given  with  the  full  intention  of  payment  at 
maturity,  been  greater  than  i%  of  the  total  outstanding 
indebtedness  of  the  brewery's  customers.  On  the  other 
hand,  notes  given  as  security  for  loans,  apparently  regular, 
which  would  have  been  accepted  by  a  careful  auditor  in 
any  other  business,  but  which  are  quite  valueless  except 
as  liens  to  be  used  in  case  of  transfer  of  the  customer's 
business,  have  often  been  met  with  among  the  ''Notes 
Receivable"  carried  as  part  of  the  brewery  assets, 

59 


6o  BREWERY   ACCOUNTS 

Cash  on  Hand 

Such  cash  as  is  deposited  in  the  bank  may  be  verified  in 
the  same  way  as  in  any  other  business.  It  is  not  possible, 
however,  to  see  that  all  moneys  received  are  promptly 
deposited  in  the  bank,  because  breweries  accept  many  post- 
dated checks,  and  also,  at  the  request  of  customers,  hold 
other  checks  until  the  customer  has  sufficient  funds  to  meet 
them. 

This  practice  of  giving  postdated  checks  has  given  rise 
to  another  practice  which  is  even  more  dangerous  to  the 
auditor.  When  postdated  checks  are  given,  the  amounts 
may  be  entered  in  the  cash  book  as  receipts;  frequently  at 
maturity  the  customer  pays  part  of  the  check,  giving  for 
the  balance  a  new  check,  still  further  postdated.  In  such 
cases  the  customers  do  not  always  ask  for  the  old  check, 
but  leave  it  in  the  hands  of  the  brewery  cashier,  to  be 
destroyed.  It  thus  happens  that  checks  entered  in  the  cash 
book  which  appear  to  be  good,  but  which  ought  to  have 
been  destroyed,  are  still  in  existence. 

The  auditor  should  make  his  verification  after  all  the 
available  checks  have  been  deposited,  and  if  necessary  he 
should  make  two  counts  of  cash,  so  as  to  *give  the  cashier 
an  opportunity  to  deposit  all  available  moneys.  After  doing 
this  the  remaining  checks,  which  may  be  either  ante-  or 
postdated,  should  be  given  a  careful  scrutiny,  and  if  pos- 
sible should  be  approved  by  the  manager. 

In  addition  to  obtaining  the  manager's  approval  of  such 
checks,  it  is  further  desirable  to  follow  them  to  their  final 
disposition,  and,  as  in  no  case  should  a  check  be  held  for 
more  than  ten  days,  the  auditor  may,  without  unreasonable 
delay,  follow  up  any  checks  of  which  he  is  suspicious. 


Part  II — Forms 


CHAPTER  XIV 

NOTES  ON  FORMS 

1.  Journal 

The  number  of  columns  required  will  vary  with  the 
number  of  divisions  into  which  the  selling  profits  are  to 
be  separated,  and  the  consequent  number  of  customers' 
ledgers.  If  ledgers  be  kept  separately  for  city  trade  in 
ale  and  in  beer,  and  for  shipment  trade  in  ale  and  beer  re- 
spectively, four  columns  for  customers'  ledgers  would  be 
needed.  Customers'  loan  ledger  will  need  a  column,  as 
the  transfers  from  liquor  accounts  to  loan  accounts  are 
numerous.  No  column  is  needed  for  the  license  ledger, 
the  few  transfers  being  entered  in  the  sundries  column. 

2.  Voucher  Record 

It  is  intended  that  the  items  in  certain  columns  shall 
be  subdivided  in  the  monthly  total,  although  all  the  sub- 
divisions are  to  be  posted  to  one  account.  Thus,  Steam  and 
Power  account  should  be  subdivided  into  its  principal  com- 
ponents, as  shown  herein  under  the  heading  "Monthly 
Reports  of  Operations." 

3-4.  Sales  Books 

It  will  be  noted  that  no  provision  whatever  has  been 
made  for  the  separate  recording  of  city  and  shipment  trade 

61 


62  BREWERY   ACCOUNTS 

or  of  ale  and  beer  trade  on  one  sales  book.  It  is  more 
convenient  to  keep  separate  sales  books  for  each  subdivision 
of  selling  accounts  that  the  brewery  maintains.  Form  3  is 
suitable  for  city  ale  trade.  Form  4  is  suitable  for  shipment 
trade,  in  that  it  records  liquor  shipped  but  not  sold,  and 
also  sales  from  stock  so  shipped  prior  to  sale. 

5.  Ledger  and   Sales   Book   Combined    (City   Lager   Beer 

Trade) 

This  book  is  so  prepared  that  the  daily  deliveries  are 
entered  only  as  to  quantities,  the  money  charges  being  made 
weekly.  The  leaf  carrying  the  names  of  customers  is  longer 
than  the  remaining  leaves,  the  best  practice  being  to  make 
up  the  book  so  that  each  long  leaf  is  succeeded  by  fifteen 
short  ones,  in  order  that  the  names  of  customers  need  be 
written  in  but  once  in  three  months. 

Where  this  ledger  is  used  the  trial  balance  may  be 
obtained  with  promptness. 

6.  Ale  Ledger 

Shipment  ledgers  are  similar  in  form  to  the  ale  ledgers. 
The  only  difference  between  these  and  standard  form  ledgers 
is  found  in  the  fact  that  columns  are  provided  for  recording 
packages  received  and  returned. 

7.  Receiving  Cash  Book 

The  number  of  columns  is  limited  by  the  number  of 
ledgers  kept. 

8.  Payments   Cash  Book 

This  is  self-explanatory. 

9.  License  Ledger 

The  cost  of  the  license,  when  purchased,  is  posted  to 
this  ledger  from  the  cash  book,  and  forms  the  debit  side 


NOTES   ON    FORMS 


63 


of  the  ledger,  column  i.  Repayments  are  entered  as  shown, 
the  total  of  the  month's  repayments  being  extended  for  each 
customer.  The  footings  of  all  the  monthly  repayment  totals 
form  the  credit  side  of  the  ledger.  An  account  in  arrears  is 
seen  on  casual  inspection. 

lo-ii.  Tables  of  Materials  and  Composition 

No  explanation  required. 

12.  Report  of  Manufacturing  Cost 
Self-explanatory. 

i3a-b.  Cellar  Slips 

Self-explanatory. 

14.  Delivery  Receipts 

These  are  forms  bound  in  books,  in  duplicate,  for  use 
with  carbon.  Alternate  leaves  are  perforated  at  "A"  and 
*'B,"  the  upper  portion  of  the  detached  leaf  being  returned 
to  the  brewery  by  the  deliveryman  and  forming  the  basis 
for  entries  in  the  sales  books ;  and  the  lower  portion,  which 
is  a  receipt  for  empties,  being  signed  by  the  deliveryman 
and  given  to  the  customer. 

15.  Collection  Register 
Self-explanatory. 

16.  Delivery  man's  Report  of  Liquor  Delivered  and  Cash 

Collected 

This  is  principally  used  for  controlled  trade,  and  on 
completion  is  used  as  a  combination  sales  book  and  cash 
receipt  book.     Where  used  as  a  daily  cash  receipt  book  the 


64  BREWERY   ACCOUNTS 

daily  totals  are  copied  out  into  a  bound  cash  book,  in  which 
are  also  entered  receipts  other  than  for  customers'  accounts. 

Sales  are  posted  from  these  sheets  to  customers'  accounts, 
the  daily  totals  being  summarized  and  posted  to  the  general 
ledger  controlling  accounts  at  the  end  of  each  month. 

As  the  deliveryman  handling  city  trade  will  not  on  the 
same  day  also  handle  shipment  trade,  separate  columns  for 
city  and  shipment  trade  are  unnecessary.  The  form  given  is 
suitable  for  a  brewery  where  city  and  shipment  trade  are 
separated,  but  not  ale  and  beer  trade.  If  this  further  sep- 
aration be  required  it  can  best  be  carried  out  by  separate 
delivery  sheets  for  ale  and  lager  beer,  not  by  adding  more 
columns  to  this  form. 

The  entries  showing  the  quantities  delivered  are  made 
in  the  brewery  office  before  the  liquor  is  sent  out ;  the  entries 
of  cash  receipts  and  returned  empties  are  made  by  the 
deliveryman;  the  customer  receipts  for  the  liquor  supplied; 
and  on  return  to  the  brewery  office  the  cash  amount  of  the 
sales  is  extended. 

17.  Summary  of  Costs 
Self-explanatory. 

i8a-b-c.  Reports  of  Operations 

Exhibit  1 8a  is  suitable  for  a  brewery  which  produces 
either  only  one  class  of  product  or  does  not  care  to  dis- 
tinguish between  differing  classes  of  liquor,  and  that  has  not 
sufficient  shipment  trade  to  make  a  separation  desirable. 
Exhibit  186  is  suitable  for  a  brewery  separating  costs  and 
sales  of  ale  from  costs  and  sales  of  beer.  Exhibit  i8c  is 
suitable  for  accounts  separating  sales  and  costs  as  between 
city  and  shipment,  and  as  between  ale  and  beer  sales  for 
each. 

An  examination  of  these  exhibits  will  furnish  all  the 


NOTES   ON   FORMS 


65 


information  necessary  to  prepare  suitable  statement  forms 
for  any  desired  division  of  sales  and  costs. 

iga-b.  Supplementary  Schedules 

The  Reports  of  Operations  are  so  prepared  as  to  show 
general  results  at  a  glance.  The  details  of  expenses  and 
costs  are  reserved  for  supplementary  schedules.  This  ar- 
rangement gives  a  much  clearer  presentation  both  of  general 
results  and  of  details  than  can  be  obtained  from  statements 
in  which  the  general  results  are  obscured  by  a  mass  of 
detail.  Also  the  supplementary  schedules  show  the  details 
of  expenses  with  a  minuteness  not  feasible  when  a  single 
statement  is  employed.  As  already  stated,  both  the  principal 
accounts  and  the  schedules  should  have  parallel  columns  for 
corresponding  figures  of  other  periods.  These  columns  are 
not  shown  on  the  exhibits,  but  the  general  arrangement  i« 
obvious. 


CHAPTER  XV 
ILLUSTRATIVE  FORMS 

The  forms  shown  in  this  chapter  have  been  reduced  in 
size  to  meet  the  requirements  of  page  space.  It  should,  of 
course,  be  understood  that  in  preparing  them  for  actual  use 
they  must  be  made  large  enough  to  be  practical  and  con- 
venient. This  is  especially  true  of  those  forms  used  by 
drivers,  collectors  and  shipping  clerks,  which  should  always 
be  of  ample  size,  so  that  employees  who  are  comparatively 
uneducated  and  unfamiliar  with  bookkeeping  may  use  them 
without  difficulty. 

The  combined  sales  book  and  ledger  shown  in  Exhibit 
5 — the  entries  in  which  are  often  very  Hastily  written — is 
always  made  of  rather  large  size,  the  width  of  the  first 
leaf  being  about  eleven  inches,  so  as  to  allow  sufficient  room 
at  the  left  for  the  names  of  customers.  Next  following 
this  come  such  number  of  shorter  leaves  as  may  be  con- 
venient, these  leaves  being  made  of  lesser  width  so  as  to 
leave  the  names  on  the  left-hand  page  visible,  thus  avoiding 
the  necessity  of  copying  these  names  each  time  a  new  page 
is  turned.  It  will  be  found  convenient  to  let  about  fifteen 
of  the  shorter  leaves  follow  each  long  leaf. 

To  hold  and  preserve  the  reports  of  manufacturing  cost 
and  the  statements  of  monthly  profits  and  losses,  a  loose-leaf 
binder  may  be  used  to  advantage. 

66 


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Exhibit  10.     Comparative  Brewing  Value  of  Materials  Used 

EQUIVALENT  WEIGHTS  Thcsc  wcights  represent  the 

Starch   (2) G     Hio    O5    =  324  weight  of  one  product  which 

Dextrin    C12    H20    Oio  =  324  may  be  obtained  from  anoth- 

Maltose C12    H22    Ou  =  342  er ;  324  lbs.  starch  may  be  con- 
Glucose  sugar 1  verted  to  342  lbs.  maltose,  360 

Dextrose,  Isevulose,  I  C«     H12    Oe   =360  lbs.  glucose  or  184  lbs.  alcohol, 

etc.    (2) J  water  being  taken  up,  and,  in 

Alcohol  ethylic  (4)     C2     H5  OH    =  184  producing  alcohol,  CO2  liber- 
Cane  sugar C12    H22    On  =  342  ated.  Glucose,  therefore,  gives 

184/360  of  its  weight  of  alco- 

Values  (pure  glucose  =  i.oo)  hoi,  or  51.1%. 

Malt  (barley)  gives  66%  extract,  of  which  61%  is  maltose, 
with  a  little  dextrin;  its  glucose  value  is 


61   X  360 


342 


=  64% 


Malt  (wheat).  Wheat  contains  (66.1%  Graham,  69% 
Church)  of  starch,  dextrin  and  glucose.  Part  of  the 
moisture  of  wheat  is  lost  in  malting,  and  more  is  taken 
up  by  the  starch  in  conversion  to  maltose.  The  content 
of  wheat  malt  in  maltose  and  its  congeners  may  be 
taken  safely  at  70%,  of  which  perhaps  65%  may  be 
available.     Its  brewing  value  is 


65  X  360 


342 


=  68.3% 


Meal  (corn)  contains  55%  starch,  52%  being  available;  its 
value  is 

52  X  360 

=  58% 

342 


ILLUSTRATIVE    FORMS  yy 

Rice  flakes,  or  cerealin,  contains  79%  starch,  70%  bein^ 
available;  value 

70  X  360 
=  78% 


324 

Cane  sugar.  95%  is  available;  5%  of  such  grades  as  are 
used  for  brewing  being  water  and  impurities;  value 

95  X  360 

=  100% 

342 

Sugar  (glucose).  Com  Products  Refining  Co.,  is  glucose 
containing  water,  the  so-called  ''sugar"  containing  70% 
of  real  glucose  and  the  "syrup"  60%.  Their  values  are, 
obviously,  70%  and  60%,  respectively. 

Other  cereals.  The  average  content  of  other  cereals  is  as 
follows : 

Total 

Per  cent  equivalent 

starch  glucose 

Wheat  (unmalted) 67  74.4 

Rye                "          ....       66  73.3 

Rice               " 78  86.6 

Oats               "         62  68.9 

Corn               "          55  61.6 

In  brewing  with  unmalted  cereals,  about  10%  of  the 
total  glucose  is  left  behind  in  the  brewers'  grains,  so  that 
the  brewing  value  of  the  above  is  about  nine-tenths  of  the 
figure  expressing  total  equivalent  in  glucose. 
(See  pages  12-14.) 


78 


BREWERY    ACCOUNTS 


Exhibit   II.     Composition   of  Various  Typical  Grades  of 
Malt  Liquors 


Total  glucose  needed 

to  furnish  alcohol, 

plus  unfermented 

glucose 


Percentage 

A 

Unfer- 
mented 

glucose  Alcohol 

English  Ale: 

Burton,  mild 6.23  6.78 

Burton,  pale 4.56  5.37 

Burton,  bitter 4.56  5.44 

Mild  X 4.03  4.60 

Mild  XXX 5.27  6.50 

Bitter  beer 1.71  4.69 

Old  ale    (Somerset- 
shire)        4.34  6.50 

Scotch  bitter.  ....  .      4.45  5.00 

Dublin  Stout  XXX .      7.90  6.78 

Dublin  Stout  XX. .  .      7.00  5.50 


Lbs.  per 
American 
Per  cent        barrel 


19.53 
15.09 

15.20 

13-05 
18.01 

10.73 

17.08 

14.25 
21.20 
17.80 


51.2 
39.5 

39-8 
34.2 
47.2 
28.2 

44.7 
37.3 
55.5 
46.6 


German  Lager: 

Vienna   4.74  4.69  13.94  36.5 

Pilsen 3.64  3.29  10.09  26.4 

Munich..., 5.11  4.75  14.41  37.7 

Tivolo 4.20  5.31  14.60  38.2 

Bohemian 2.85  3.81  10.32  27.0 

Bavarian 4.50  4.14  12.61  33.0 


Calculated   from  analyses  by   C.    Graham    (Society  of 
Chemical  Industry).     For  convenience  of  comparison,  dex- 
trin and  maltose  shown  in  the  original  analysis  have  been 
calculated  to  glucose  by  the  author. 
(See  pages  12-14.) 


ILLUSTRATIVE    FORMS 


79 


The  following  analyses,  by  the  chemists  named,  gave  as 
"extract"  the  total  un fermented  carbohydrates,  etc.  For 
this  reason  the  glucose  is  partly  estimated. 


Percentage  of 

Alcohol  "Extract' 

Pilsen  beer 3.55  5.15 

Hanoverian  (20sam- 

ples) 4.01  6.34 

English  public  house 

(61  samples) ....  5.00  4.89 

Bass'  pale  ale 6.25  6.98 

All  sop's  pale  ale. ...  6.37  4.44 

Barclay  &   Perkins' 

porter ,  5.40  6.00 

American  lager  (19 

samples) 2.88  6.05 


Glucose 

per 
American 
barrel         Authority 

29.8     Kohlrausch 

35.5     Scalweit 

35.0     Carter  Bell 
47.0     Lawrence  & 

Reilly 
42.0     Lawrence  & 

Reilly 

42.       Kayser 
29.5     Engelhart 


Since  these  analyses  were  made  the  increased  price  of 
malt  has  led  American  brewers  to  carry  further  the  attenua- 
tion of  the  wort,  and  American  beer  now  averages  higher 
in  alcohol  and  lower  in  extract  than  the  above  figures. 


8o 


BREWERY   ACCOUNTS 


Exhibit  12.     Periodical  Report  of  Manufacturing  Cost 

(Comparative  figures  for  other  periods  may  be  added  in  par- 
allel columns.) 
REPORT   OF    MANUFACTURING   COST    FOR  MONTHS   ENDED 

,    I913 


Barrels  brewed 

Quantity  per  barrel 

Cost 

per  barrel, 

cents 

Amount 

Materials  : 
*Malt                                       lbs. 

*Hops                                       lbs. 

*  Sugar  (glucose)                    lbs. 

*Meal                                        lbs. 

*Flakes                                     lbs. 

*Other  cereals                          lbs. 

*Water  and  sundries 

*These  items  represent  the  month's  consumption,  credited  to 
the  respective  inventory  accounts  and  charged  against  Manufac- 
turing account. 


Expenses  : 
*  Labor 

*  Refrigeration 

• 

*  Steam  and  power 

tDepreciation  reserved 

fTaxes 

*  Supplies 

♦Sundry  expenses 

Total 

Less  grains  recovered 

Cost  of  liquor,  charged  to  Liquor 
Stock  account 

*Each  of  these  items  represents  the  total  of  a  general  ledger 
account  closed  out  monthly  to  Manufacturing  account. 

fMonthly  provisions,  credited  to  reserves  for  Taxes  and  for 
Depreciation. 
(See  pages  17-19.) 


ILLUSTRATIVE    FORAIS 


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82 


BREWERY   ACCOUNTS 


Exhibit  13b.     Cellar  Slip— Ale 


Ale  Cellar  Ticket 

1 

Casks 

Bbls. 

K 

K 

Brand 

X  X 

Still 

Canada  Malt 

Stock 

East  India  P. 

Porter 

Stout 

Total 

Received  in  good  condition 

Driver 

(See  page  27.) 


ILLUSTRATIVE    FORMS 


83 


Exhibit  14.     Delivery  Receipts 

A 


191 


Name 


Address 


Received  from  Tri-City  Brewery,  stamped,  and  stamps 
duly  canceled : 


Cream  ale 
Still  ale 
Porter 
Stock  ale 
Stout 


Casks 

Bbls. 

y2 

'A 

Bbls. 

'A 

A 

Lager  beer 


84 


BREWERY   ACCOUNTS 
Returned 


Casks 

Bbls. 

y2 

M 

Empty 
Part  full 


B 


Received  by  Tri-City  Brewery 


From 


Casks 

Bbls. 

'A 

Va 

Empty 
Part  full 


Date, 


Driver 


(See  pages  27,  63.) 


ILLUSTRATIVE    FORMS 


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ILLUSTRATIVE    FORMS 


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Exhibit  17.     Summary  of  Costs 

SUMMARY  OF  AVERAGE  COSTS  PER  BARREL  IN  TYPICAL 

WELL-MANAGED  BREWERIES,  CAPACITY  150,000 

TO   400,000   BARRELS    ANNUALLY 


Cents  per  barrel 

Low 

High 

Materials  : 

Malt,  glucose,  flakes,  meal,  sugar 

80 

145 

Hops 

8 

19 

Water 

2 

4 

Sundry  materials 

I 

I 

Manufacturing  Cost: 

Labor,  brewmaster,  kettlemen,  etc.,  up  to  but 
not  including  rackers,  not  including  re- 
frigeration and  power 

14 

22 

Fuel 

6 

9 

Refrigeration  expense,  not  including  fuel 

6 

10 

Depreciation    of    plant,    not    including    floating 
cooperage  nor  horses  and  wagons 

7 

8 

Repairs    (not  renewals) 

3 

3 

Light,  insurance  and  taxes 

6        1            ID 

Settling  Expenses  : 

Collectors'  salaries  and  exp. 

30        !           36 

"     (controlled  trade) 

9       ' 

Bad  debts  (uncontrolled  trade) 

26             41 

"        (controlled  trade) 

10       1         16 

Miscellaneous 

20 

26 

Distributing  Expenses  : 

Repairs  to  packages,  coopers'  wages  and  mat'ls 

8 

9 

Horse  and   stable    (horse  delivery) 

20 

26 

Drivers'  wages,  ferries,  tolls,  etc.,  and  wagon  rep. 

28 

31 

Delivery  by  auto-truck — not  sufficient  experience 
has  been  had  to  aflFord  reliable  data.     The 
cost  is  largely  made  up  of  repairs  to  autos 
and  damage  expenses  to  other  property  and 
persons 

Replacement  of  floating  cooperage  - 

3 

3 

(See  pages  33,  34.) 


88 


BREWERY   ACCOUNTS 


Exhibit  1 8a.     Report  of  Operations 

TRI-CITY  BREWERY 

TRADING  AND   PROFIT   AND   LOSS   ACCOUNT  FOR 
MONTHS  ENDED 


Barrels  sold 

Per 
barrel 

Amount 

Sales,  less  returns 

Discounts,  allowances  and  freight 

Net  sales 

Cost  of  liquor 

Revenue  stamps 

Selling  expenses  (per  schedule) 

Distributing       "       " 

Administrative  *' 

Total  cost  of  sales 

' 

Brewery  profit 
Other  income : 

Bottling  dept.,  profit  or  loss 

Rentals 

Miscellaneous 

Total  net  profit 

(See  pages  29,  30,  48,  64,  65.) 


ILLUSTRATIVE    FORMS 


89 


Exhibit  1 8b.     Report  of  Operations 

TRI-CITY  BREWERY 

TRADING  AND   PROFIT   AND   LOSS   ACCOUNT   FOR 

MONTHS  ENDED  


Ale 

Lager  beer 

Per 

bbl. 

Amount 

Pel 
bbl. 

Amount 

Sales  less  returns 
Disc'nts,  allow,  and  freight 

Net  sales 

Cost  of  liquor 

Revenue  stamps 

Selling  exp.  (per  schedule) 

Distrib.    " 

Admin.     " 

Total  cost  of  sales 

Brewery  profit 

I 

— 

Brewery  profit  brought  down 

Ale 

Beer 
Other  income: 

Rentals 

Bottling  department 

Miscellaneous 

Total  net  profit 

90 


BREWERY   ACCOUNTS 


Exhibit  1 8c.     Report  of  Operations 


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ILLUSTRATIVE    FORMS 


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92 


BREWERY   ACCOUNTS 


Exhibit  iga.     Supplementary  Schedule 

TRI-CITY  BREWERY 

SUPPLEMENTARY    SCHEDULE   TO    REPORT    OF 
OPERATIONS,  ,   1913 


Mos. 

to  date 

Corresponding 

period 

last  year 

Distrib,  expenses,  city  trade  only: 
Wages — drivers  and  chauffeurs 
Horse-feed,   gasoline 
Veterinary  and  shoeing 
Repairs  to  harness  and  vehicles 
Stable  help 
Depreciation,  horses  and  vehicles 

Total 

Distributed  on  per  barrel  basis,  to 
Ale  and  porter 
Lager  beer 

» 

Distrib.  exp.,  shipment  trade  only: 
Rent  and  storage 
Stable  expense 
Trucking 
Miscellaneous 

Total 

(See  pages  29,  30,  65.) 


ILLUSTRATIVE    FORMS 


93 


....  Mos. 
to  date 

Corresponding 

period 

last  year 

Distributed  on  per  barrel  basis : 
Ale  and  porter 
Lager  beer 

Distributing  expenses,  applicable  to 
entire  trade,  on  per  bbl.  basis: 
Coopers'  wages 

Shooks  and  supplies  for  coopers 
Depreciat'n  of  floating  cooperage 

Total 

Distributed  on  per  barrel  basis: 
City  ale 
City  beer 
Shipment  ale 
Shipment  beer 

Exhibit  19b.     Supplementary  Schedule 

TRI-CITY  BREWERY 
SUPPLEMENTARY  SCHEDULE  TO  REPORT  OF 


OPERATIONS, 


1913 


Mos. 

to  date 

Corresponding 

period 

last  year 

Selling  expenses,  city  trade  only: 
Collectors'  salaries 
Collectors'    exp.   and   commis'ns 
Donations  and  subscriptions 
Signs  and  advertising 
Rep.  to  saloon  fixtures  and  app. 

Total 

94 


BREWERY   ACCOUNTS 


Mos. 

to  date 

Corresponding 

period 

last  year 

Distributed  on  per  barrel  basis  to 
Ale 
Beer 

Selling  exp.,  shipment  trade  only: 
Collectors'   sal,   com.   and   exp. 
Signs  and  advertising 
Repairs  to  saloon  fixtures,  etc. 
Sundries 

Total 

Distributed  on  per  barrel  basis  to 
Ale 
Beer 

• 

Sell'g  exp.,  applicable  to  entire  trade : 
Brewers'  assessments 
Office  expenses 
Legal  expenses 
Bad  debts 

Total 

Distributed  to 
City  ale 
City  beer 
Shipment  ale 
Shipment  beer 

INDEX 

A 

Accounts  receivable,  55,  56. 

Administrative  expenses,  44,  45. 

Advertising,  35. 

Agencies,  30. 

Alcohol-producing  materials,  12-14. 

Ale 

Accounts,  55. 

Composition  of,   13,   14. 
Exhibits,  78,  79. 

Ledger,  62. 

Exhibits,  72. 

Price  of,  24,  56,  57. 

Sales  book,  18,  61,  62. 
Exhibits,  69,  70. 
Allowances,  22-24,  28,  29,  Z1 ,  56. 
Ammonia,  use  of,  17. 
Analysis  of  brewery  products,  14. 
Assessments,  brewers'  association,  Zd. 
Assets 

Bills    receivable,   59. 

Cash  on  hand,  60. 

Customers'  accounts,  55-58. 

Inventory,  53. 

Saloon  fittings,  53,  54. 
Auto  trucks,  40. 


B 


Bad  debts,  33,  34. 
Bills  receivable,  59. 
Books 

Account,  9-11. 
Ale  ledger,  62. 

Exhibits,  72, 
Ale  sales  book,  18,  61,  62. 

Exhibits,   69,    70. 

95 


96 


INDEX 


Books — Continued. 

Cash  books,  31,  62-64. 

Exhibits,  73,  74. 
Combined  cash  and  sales  sheets,  63,  64. 

Exhibits,  86. 
Combined  sales  book  and  ledger,  28,  62. 

Exhibits,   71. 
Customers'  ledgers,  28,  55,  62. 

Exhibits,  71,  72. 
Customers'  pass-books,  28. 
Journal,  61. 

Exhibits,  67. 
License  ledger,  62,  63. 

Exhibits,  75. 
Sales  books,  18,  27,  28,  30,  61,  62,  66. 

Exhibits,  69-71. 
Sales  ledgers,  28,  30,  62,  66. 

Exhibits,  71,  72. 
Bottling  accounts,  35,  50. 
Buildings,  16,  20,  21,  51.     . 


Carbon  dioxide  as  refrigerant,  17. 
Cash  books,  31,  62-64. 

Exhibits,  73,  74. 
Cash  on  hand,  60. 
Cellar  slips,  27.  ^ 

Exhibits,  81,  82. 
Chattel  mortgages,  22,  58. 
Checks,  postdated,  60. 
Collateral  for  loans,  22,  58. 
Collection  reports,  31,  36. 

Exhibits,  85,  86. 
Collections,  30,  31,  36. 
Collectors,  25,  32,  33,  36. 
Combined  cash  and  sales  sheets,  63,  64. 

Exhibits,  86. 
Combined  sales  book  and  ledger,  28,  62,  66. 

Exhibits,    71. 
Commission  to  salesmen,  25,  32,  33,  36. 
Composition  of  liquor,  13,  14. 

Exhibits,  78,  79. 
Consumption  of  liquor  in  brewery,  16,  17- 
Controlled  customers,  26 


INDEX  '  07 


Cooperage 

Fixed,  51,  52. 
Floating,   39-43,  52. 
Cost  accounts,  17-19. 

Exhibits,  80,  88-94. 
Cost  of  goods  sold,  15-19.  25,  26,  Zl ,  38. 
Summary   of 

Exhibits,  87. 
Cost  of  manufacturing,  report  of. 

Exhibits,  80. 
Country  breweries,  46,  47,  (iZ,  64. 

Exhibits,  86. 
Country  trade,  29,  30. 
Credits  to  loan  accounts,  29,  56,  57. 
Customers 

Accounts,  27-31,  55-58. 
Ledgers,  28,  55,  62. 
Exhibits,  71,  72. 
Loans  to,  22-24,  29,  55-59. 
.     Notes,   59. 
Pass-books,  28. 


Daily  verification  of  sales,  27. 

Debts,  bad,  ZZ,  34. 

Delivery  receipts,  27,  46,  47,  dZ. 

Exhibits,  83,  84,  86. 
Depreciation,  16,  20,  39-43,  51,  52. 
Discounts,  trade,  22-24,  28,  29,  Zl ,  56. 

Reserve  for,  28,  29,  Zl . 
Distributing  expenses,  18,  19,  39-43. 


£ 


Expense  accounts 

Closing,  36. 
Posting  to,  36. 
Expenses 

Administrative,  44,  45. 

Distributing,  18,  19,  39-43. 

Entry  of,  45. 

Manufacturing,  15,  19-21,  44,  45. 

Office,  20,  36,  44. 

Selling,  18,  19,  25,  32-38,  44,  45. 


98  INDEX 

F 

Fixed  cooperage,  51,  52. 
Fixtures,  saloon,  22-24,  53,  54. 
Floating  cooperage,  39-43,  52. 


Glucose,  12-14,  76,  11. 

Good-will  loan  accounts,  23. 

Government  requirements,  10,  11,  Z1 ,  38,  53. 

Grains,  brewers',  17. 


H 


Hops — hop  extract,  14,  15. 
Horses  and  vehicles,  40. 


Insurance  account,  19. 
Inventory,  40,  53. 
Accounts,  18. 


Journal,  61. 

Exhibits,  67. 


Labor  and  expense  accounts,  15,  20. 
Lager  beer 

Accounts,  55. 
Composition  of,   13,   14. 

Exhibits,  78,  79. 
Price  of,  24,  56,  57. 
Returns  of,  Zl . 
Sales   of,  36. 
Ledger 

Ale,  62. 

Exhibits,  72. 
License,  62,  63. 

Exhibits,  75. 


INDEX  gg 


Ledgers 

Customers',  28,  55,  62. 
Exhibits,  71,  72. 

Sales,  28,  30,  62,  66. 
Exhibits,  71,  72. 
License  ledger,  62,  63. 

Exhibits,   75. 
License  loans,  23,  24,  55,  56,  62,  63. 
Liquor  stock  account,  11,  21,  28,  53. 
Loans  to  customers,  22-24,  29,  55-59. 

Collateral  for,  22,  58. 

Credits  to,  29,  56,  57. 

License,  23,  24,  55,  56,  62,  63. 

Value  of,  23. 

Verification  of,  57,  58. 
Loss  in  brewing,  11,  16. 
Loss  from  legislation,  34. 
Lupulin,  14. 


Machinery  and  plant,  51,  52. 
Manufacturing 

Accounts,  9-21. 
Cost,  report  of. 

Exhibits,  80. 
Expenses,    15,    19-21,  44,  45. 
Record  of,  20,  21. 
Materials,  10-15,  53. 

Exhibits,  76-79. 
Alcohol-producing,   12-14. 
Hops,  14,  15. 
Purchase  of,  10,  20. 
Relative  values  of,  13. 

Exhibits,  76,  77. 

Withdrawals  of,  10,  20. 

Monthly  reports,  48,  49,  64,  65. 

Exhibits,  88-93. 
Mortgages,  chattel,  22,  58. 


N 


Notes,  customers',  59. 


lOO  INDEX 

O 

Office  expenses,  20,  36,  44. 
Officers'  salaries,  44,  45. 
Operation,  reports  of,  48,  49,  64,  65. 

Exhibits,  88-94. 
Orders,  routine  of,  27. 
Out-of-town  trade,  29,  30. 


Packages,  care  of,  40-42.     (See  also  Cooperage.) 

Pass-books,  customers',  28. 

Pay-roll,  32,  33,  42.     (See  also  Labor.) 

Plant  and  machinery,  51,  52. 

Postdated  checks,  60. 

Posting,  20,  21,  31,  36,  VJ . 

Power,  16,  20. 

Prices,  selling,  24-26,  30,  56,  57. 

Purchase  of  materials,  10,  20. 


Quantity  brewed,  10,  11,  20. 


Real  estate  and  buildings,  51. 
Receipts,  delivery,  27,  46,  47,  63. 

Exhibits,  83,  84,  86. 
Repairs 

Brewery,  19,  21. 
Cooperage,  39. 
Saloon  fixtures,  35. 
Replacement  of  cooperage,  39-43. 
Reports 

Collectors',  31,  36. 

Exhibits,  85,  86. 
Delivery,  27,  46,  47,  63. 

Exhibits,  86. 
Operation,  48,  49,  64,  65. 
Exhibits,  88-94. 
Reserve 

For  bad  debts,  34. 

For  discount,  28,  29,  V7. 


INDEX 


lOI 


Return 

Of  empties,  40. 

Of  liquor,  37. 
Revenue  stamps,  37,  38,  53. 
Routine  of  orders,  27. 


S 


Salaries 

Office,  36. 

Officers',  44,  45. 

Salesmen's,  25,  32,  33,  36. 
Sales 

Books,  18,  27,  28,  30,  61,  62,  66. 
Exhibits,  69-71. 

Daily  verification  of,  27. 

Entry  of,  18,  27,  28,  30. 

Ledgers,  28,  30,  62,  66. 
Exhibits,  71,  72. 
Salesmen,  compensation  of,  25,  32.  33,  36. 
Saloon 

Fixtures,  22-24,  35.  13,  54. 
Valuation  of,  53,  54. 

Property,  26,  51. 
Schedules,  supplementary,  65. 

Exhibits,  92-94. 
Selling 

Accounts,  27-31. 

Expenses,  18,  19,  25,  32-38,  44,  45. 

Methods,  24,  25. 

Prices,  24-26,  30,  56,  57. 
Signs,  35. 

Stamps,  revenue,  37,  38,  53. 
Statements,  customers*,  30,  31. 
Summary  of  costs, 
Exhibits,  87. 


Taxes  account,  19. 


Valuation  of  saloon  fixtures,  53,  54. 


I02  INDEX 

Verification 

Of  loans,  57,  58. 
Of  prices,  56,  57." 
Voucher  record,  10,  61. 
Exhibits,  68. 


W 


Waste  and  loss  in  brewing,  11,  16,  17. 
Water  account,  19-21. 
Withdrawal  of  materials,  10,  20. 


^ 


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